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The law signed by Trump last week imposes a $10,000 combined
limit on the deduction of state and local income and property
taxes. There is no limit on that deduction for 2017.
In a notice on its website, the IRS said that, in general, a
full deduction for the prepayment of state or local property
taxes depends on whether the taxpayer makes the payment this
year and whether the property taxes are assessed prior to 2018.
"A prepayment of anticipated real property taxes that have not
been assessed prior to 2018 are not deductible in 2017," the IRS
notice said.
"State or local law determines whether and when a property tax
is assessed, which is generally when the taxpayer becomes liable
for the property tax imposed," it said.
The massive $1.5 trillion tax overhaul passed the
Republican-controlled Congress with no Democratic support. It
slashes the corporate rate to 21 percent from 35 percent and
temporarily reduces the tax burden for most individuals as well.
Capping the deduction for state and local income and property
taxes is seen as punitive to high-tax states such as New York,
New Jersey and California.
On Friday, New York Governor Andrew Cuomo issued an order
allowing state residents to make either a partial or full
pre-payment on their property tax bill prior to Jan. 1 in order
to benefit from the federal tax deduction.
(Reporting by Eric Beech; Editing by Matthew Lewis)
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