Chris Christie signs executive order on property tax payments

James Nash
NorthJersey

As some New Jersey property owners scramble to pre-pay 2018 property taxes before the end of the year to write them off of their 2017 returns, Gov. Chris Christie signed an executive order requiring municipalities to credit the payments.

In this Thursday, May 19, 2016, file photograph, Republican presidential candidate Donald Trump, left, stands with New Jersey Gov. Chris Christie at a campaign event in Lawrenceville, N.J. Christie quickly became the biggest Republican name to throw his support behind Donald Trump after ending his own campaign.

The outgoing governor's action comes as federal tax reform signed by President Trump Dec. 22 sets a $10,000 limit on state and local taxes that can be written off from federally taxed income beginning in 2018. Christie supported the federal tax law even though high-tax states like New Jersey, New York and California stand to lose the most from rolling back the deduction.

“The action I took today will ensure that local governments are flexible and accommodating of their local property taxpayers as we transition to the new federal tax code for 2018," Christie said in a statement from his press office. "This executive order requires local officials to dedicate the resources and staffing to serve New Jerseyans who are planning in this way for their families and their futures."

The pre-payments must be postmarked on or before Dec. 31. On Jan. 1, the new federal law sharply limits deductions for state and local taxes. 

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The federal law barred taxpayers from pre-paying their income taxes for 2018 but made no such prohibition regarding property taxes, so some localities in New Jersey and other states made provisions for pre-payments before year's end. Christie's order requires all local jurisdictions to do so.

With the nation's highest property taxes, New Jersey has among the largest proportion of taxpayers who itemize their tax returns to claim deductions for state and local taxes. According to the nonprofit Tax Foundation, the average value of such deductions represents 8.7 percent of New Jerseyans' income, which is second only to New York.

The IRS said Wednesday that some homeowners who prepay local property taxes due in 2018 will be able to claim the deduction on this year's returns, but only if the taxes have already been assessed and billed. People can't guess at what next year's assessment might be, pay it now and claim a deduction for that amount.

"A prepayment of anticipated real property taxes that have not been assessed prior to 2018 are not deductible in 2017," the IRS said on its website.

The Associated Press contributed to this article.