WASHINGTON –Homeowners who prepaid their 2018 property taxes would be allowed to deduct the full amount on their 2017 income tax returns under legislation introduced Thursday by two Garden State lawmakers
The bill would overturn an Internal Revenue Service ruling that only 2018 property taxes previously billed would be deductible on the returns due April 15.
Residents in New Jersey and other high-tax states rushed to prepay their property taxes in response to the Republican-enacted tax bill that capped the state and local tax deduction at $10,000.
“It took the IRS five days after the bill passed and four days before the end of 2017 to issue guidance that would limit the deductibility based on the date of the property tax assessment,” said Rep. Leonard Lance, R-7th Dist., the bill’s lead sponsor.
“That ruling isn’t fair and our legislation instructs the IRS to allow full deductibility to protect New Jersey taxpayers.”
Three of the four other House Republicans from New Jersey, Reps. Frank LoBiondo, R-2nd Dist.; Chris Smith, R-4th Dist.; and Rodney Frelinghuysen, R-11th Dist., are co-sponsoring the legislation.
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