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Congressman Randy Hultgren

Representing the 14th District of ILLINOIS

Illinois Residents Get Full Deduction for Prepaid Property Taxes

Mar 28, 2018
Press Release

Washington, DC — In a victory for families across Illinois, the U.S. Department of the Treasury has agreed that an advisory issued by the IRS does not address Illinois and, therefore, taxpayers in Illinois are not bound by the IRS guidance and are able to deduct their prepaid property taxes. In December, the IRS issued an advisory that created confusion about the property tax deduction for individuals who prepaid them in December.

“I am very pleased that Treasury clarified this important issue for hardworking families in Illinois who prepaid their property taxes last year,” said Rep. Hultgren. “Since the Tax Cuts and Jobs Act took effect on January 1, Illinois individuals, families and small businesses are reaping the benefits of lower tax rates, a doubled standard deduction and a doubled child tax credit.”

Background

  • On December 27, 2017, the IRS issued an advisory regarding pre-payment of 2018 state and local real property taxes in 2017. 
  • The advisory provides information for taxpayers who prepaid 2018 property taxes at the end of 2017 and examples to clarify which taxpayers would not be subject to a deduction cap that went into effect in January 2018.
  • Illinois property tax payments pay for the prior year. It was unclear if the IRS guidance applied to Illinois, as taxpayers who prepaid were not paying 2018 taxes.
  • The United States Treasury agreed that the advisory does not apply to Illinois.
  • Taxpayers in Illinois are therefore able to deduct without a cap any prepaid property taxes submitted in 2017.

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