Dec. 27 (UPI) -- The Internal Revenue Service clarified Wednesday that taxpayers can prepay their 2018 property taxes under certain conditions.
The IRS announced only taxpayers who have received a tax assessment from their local government and made payment by the end of the year are permitted to prepay their property taxes after President Donald Trump signed a new Republican tax bill onto law.
States and localities will be forced to interpret the guidance for residents and establish plans to reverse payments following the last-minute clarification.
Many residents in states with high property taxes are racing to prepay their 2018 property bill before Trump's new tax rules go into effect.
Homeowners in states like New York, New Jersey, California and Connecticut are looking ahead to the new $10,000 cap on the deduction for state and local levies, including property taxes, found in the tax overhaul signed into law last week.
The new limit in deductions could cost some residents thousands of dollars.
"Under the new federal tax code, many Long Islanders are going to lose out on valuable tax deductions," Donald Clavin, the town receiver of taxes in Hempstead, N.Y., said in a statement.
"In our office, we've helped a significant number of taxpayers during the holiday season who are seeking to get the 'gift' of a tax deduction before the opportunity runs out."
"The additional tax savings we can provide New Jerseyans by maximizing the deductibility of property tax prepayments does not take away from the unfairness of the red-state tax bill that sharply curtails the deductibility of state and local income taxes that has been a staple of the federal tax code since the enactment of the income tax in 1913," Sweeney said.
WTOP reported that hundreds of homeowners in Virginia stood in line Tuesday to prepay their bill.
"We've had some who want to pay as far out as three years," Scott Sizemore, director of revenue collection in Fairfax County, said. "Because future tax rates have not been set by the board of supervisors, as of this time, we're having them make the same payment they made last year for their real estate taxes."
The new tax law, which was signed Friday by Trump before he left for Christmas vacation, facilitated local governments -- including the Montgomery County Council in Maryland to quickly alter their rules in an attempt to allow residents to prepay taxes.
The rush came after New York Gov. Andrew Cuomo signed an executive order last week to allow New York residents to prepay their property taxes.
"You can partially prepay or fully prepay and get your deductions for your property tax payment," Cuomo said in a statement. "At least this device will postpone the pain for one year."