We have received several calls this week about prepaying 2018 property tax by December 31, 2017 in light of the cap on deductibility of those taxes that will be in place for 2018. Kentucky does not have a mechanism to accept these early payments and will not accept them so it becomes a moot point for Kentucky purposes.
However, for those states like New York that are currently accepting prepayment of 2018 property taxes, IRS released (IR-2017-210) yesterday (December 27) which indicates those payments are not deductible in 2017 unless the 2018 taxes are assessed prior to 2018: “A prepayment of anticipated real property taxes that have not been assessed prior to 2018 are not deductible in 2017.”
For those states that allow you to pay your property taxes in installments (California, West Virginia, etc.) that are due in early in 2018 that have already been assessed you should consider prepaying these property taxes by December 31, 2017.
