Dec 18, 2017

Prepayment of state and local taxes and real estate taxes in 2017

The Tax Cuts and Jobs Act (H.R.1) prohibits the prepayment of state and local taxes for years after the effective date of the Act.
However, this does not prohibit the prepayment of real estate taxes. To that end, it may be advantageous for many taxpayers to prepay their Illinois real estate taxes that would otherwise be paid in 2018 in 2017.
Here are the procedures prescribed by Cook CountyLake County and DuPage County for the maximum amount that can be prepaid and the procedure adopted by each county for prepayment.
The above prohibition does not appear to restrict the payment in 2017 of estimated state and local income taxes otherwise due on January 15, 2018.
Before deciding to accelerate the payment of the above taxes, you should review the impact on Alternative Minimum Tax (AMT) to determine if AMT limits the benefit of making an early payment.

This Chuhak & Tecson, P.C. communication is intended only to provide information regarding developments in the law and information of general interest. It is not intended to constitute advice regarding legal problems and should not be relied upon as such.

Client alert authored by: Edwin I. Josephson, Principal