Message from the Mayor: Final update on pre-payment of local taxes
Posted on: December 27, 2017 - 11:07am
Fellow Residents,
This is an update to the note I sent earlier regarding the opportunity for pre-payment of taxes. In the intervening period, I have worked with the Village attorney, Town Supervisor Paul Feiner, School Board President Lisa Litvin and the School Board attorney to confirm what we can do. The email we put out on December 23rd still holds. I repeat below the important information for you regarding what you can do regarding paying your local property taxes.
The tax reform package signed earlier this week by the President impacts the deductibility of State and Local taxes (“SALT”) next year. Governor Cuomo issued an executive proclamation that allows for early payments of Town and County taxes: specifically, those who are ready to issue what is called a “warrant”, which typically means they have completed a budget. The governor’s proclamation did not include much guidance and we have spent some time over the last few days seeking to better understand it, including speaking with the Governor’s office.
We can say the following about pre-payment of various property taxes, with this caveat: the tax reform law is complex and whether the $10,000 SALT cap affects you or not depends upon many factors, including whether you are impacted by the Alternative Minimum Tax, the types of your income and many other factors. We are not offering advice here – but instead providing information about local property taxes to provide some input to any discussions you might have with your financial or tax advisor. We encourage you all to consult with your tax advisor as to the implications of the tax reform package on you and the best steps for you to take.
Village Taxes
The Village fiscal year runs from June 1st through May 31st. Village taxes for the current 2017-2018 cycle are due by December 31st – and at that point then you will be fully paid through May 31st. If you DO pay your property taxes directly and your taxes are not escrowed by your bank, this is probably NOT the year for you to be late with your payment. It is not possible to pre-pay the 2018-2019 Village taxes since the tax year does not commence until June 1, 2018, and the budget and tax warrant will not (and cannot) be completed until late April/May. If you attempt to pre-pay those taxes, we will return those payments to you.
The Village fiscal year runs from June 1st through May 31st. Village taxes for the current 2017-2018 cycle are due by December 31st – and at that point then you will be fully paid through May 31st. If you DO pay your property taxes directly and your taxes are not escrowed by your bank, this is probably NOT the year for you to be late with your payment. It is not possible to pre-pay the 2018-2019 Village taxes since the tax year does not commence until June 1, 2018, and the budget and tax warrant will not (and cannot) be completed until late April/May. If you attempt to pre-pay those taxes, we will return those payments to you.
School Taxes
The second half of the 2017-1018 School Taxes are payable by the end of January 2018. The bill for both halves was sent at the end of August and these taxes are considered already due, although you are allowed to pay it as late as January. Therefore you CAN pay that second payment this year, and it may make sense for you to do so since next year they will not be deductible beyond the $10,000 cap. If you pay them this year, the payment will be deductible this year. This is easiest to do if you pay your own taxes and the bank does not escrow them for you. However, if your bank escrows and pays for those taxes, unless you are able to stop them from doing so, your bank will pay the second School Tax payment again in January, effecting a duplicate payment. Some residents have had good luck reaching out to their mortgage company (an example was Wells Fargo), who worked with them to issue an early payment. Securing a refund of this duplicate payment from Greenburgh, which collects the School taxes on our behalf, is laborious – doable, but laborious. Given that half payment of your school taxes represents 35% of your overall property tax bill, and that it amount to approximately $5-8,000, this could represent very real savings for certain property owners. The school is legally unable to issue a warrant for 2018-2019 and you cannot pre-pay those taxes.
The second half of the 2017-1018 School Taxes are payable by the end of January 2018. The bill for both halves was sent at the end of August and these taxes are considered already due, although you are allowed to pay it as late as January. Therefore you CAN pay that second payment this year, and it may make sense for you to do so since next year they will not be deductible beyond the $10,000 cap. If you pay them this year, the payment will be deductible this year. This is easiest to do if you pay your own taxes and the bank does not escrow them for you. However, if your bank escrows and pays for those taxes, unless you are able to stop them from doing so, your bank will pay the second School Tax payment again in January, effecting a duplicate payment. Some residents have had good luck reaching out to their mortgage company (an example was Wells Fargo), who worked with them to issue an early payment. Securing a refund of this duplicate payment from Greenburgh, which collects the School taxes on our behalf, is laborious – doable, but laborious. Given that half payment of your school taxes represents 35% of your overall property tax bill, and that it amount to approximately $5-8,000, this could represent very real savings for certain property owners. The school is legally unable to issue a warrant for 2018-2019 and you cannot pre-pay those taxes.
Town Taxes
Greenburgh’s tax cycle is January 1 through December 31st and the Town Board is scrambling to take the action now permitted by Cuomo’s decree to allow pre-payment of the 2018 Town taxes this year. The Town is ready to accept payments today – go to www.greenburghny.com to understand what you should do. Do not call the Village regarding payment of Town taxes – we cannot help you! Town taxes represent a small portion of your property taxes – around 2% - and it may not be worth pre-paying if you escrow because securing the refund could be more trouble than its worth. If you pay town taxes directly, it may make sense for you to pay these taxes early. We anticipate www.greenburghny.com will provide further guidance on this.
Greenburgh’s tax cycle is January 1 through December 31st and the Town Board is scrambling to take the action now permitted by Cuomo’s decree to allow pre-payment of the 2018 Town taxes this year. The Town is ready to accept payments today – go to www.greenburghny.com to understand what you should do. Do not call the Village regarding payment of Town taxes – we cannot help you! Town taxes represent a small portion of your property taxes – around 2% - and it may not be worth pre-paying if you escrow because securing the refund could be more trouble than its worth. If you pay town taxes directly, it may make sense for you to pay these taxes early. We anticipate www.greenburghny.com will provide further guidance on this.
County Taxes
The County will not have a warrant in place to allow for pre-payment of next year’s taxes. If we hear differently, we will alert you to this immediately.
The County will not have a warrant in place to allow for pre-payment of next year’s taxes. If we hear differently, we will alert you to this immediately.
This tax reform law was passed in a hurry and its impacts are still unclear. The Board is extremely concerned about the impact of the limitation of the SALT deduction on our community – it is likely to impact housing prices as well as the ability of some people within Hastings to continue to be able to afford to live here. That is profoundly upsetting and discouraging. We will be putting together a working group to help us understand likely impacts as well as identify what (if anything) we can do to ameliorate those impacts. If you have salient tax and legal experience that could prove beneficial to such a group and would like to serve, please send a note to volunteer@hastingsgov.org
We hope this is all helpful.
Sincerely,
Peter Swiderski