CUOMO SIGNS EXECUTIVE ORDER THAT ALLOWS HOMEOWNERES TO PREPAY THEIR PROPERTY TAXES

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On December 22, 2017, Governor Andrew M. Cuomo signed an executive order that allows homeowners in New York to prepay their 2018 property taxes by the end of 2017. The goal is to mitigate the impact of H.R. 1 (known as the “Tax Cuts and Jobs Act”) signed into law by President Trump which modifies and limits the state and local income tax and property tax deduction. Under prior law, in general, subject to the alternative minim tax, state and local income tax and property tax could be deducted from federal income taxes of an individual if the taxpayer itemized their deductions, even if the deduction was unrelated to business or for-profit activity. The Act modifies this deduction for state and local income and property taxes, subject to a $10,000 exception ($5,000 for married taxpayer filing a separate return). It should be noted that foreign real property taxes are not subject to this exception and therefore, foreign real property taxes cannot be deducted.*1

The Act also provides that one cannot prepay their 2018 income taxes in 2017 to avoid this change in 2018. However, such limitation does not apply to property taxes. Therefore, state and localities are encouraging their constituents to prepay their property taxes before year-end, if possible. We also encourage our clients who might be affected to do the same.

*1 For your convenience, we have included Section 11042 of the Act.

NYS – EXTENDING FILING DEADLINES

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As a result of the snowstorm, NYS has extended filing deadlines due March 15, 2017 to March 20, 2017. In general, no special relief needs to be requested; only that the tax returns need to be field by March 20, 2017. This would include, for example, the partnership tax return due March 15, 2017.

The exceptions to this relief include (i) remittances of income tax withheld by employers required to file NYS-1 and remittances of withholding tax or MCTMT required to be made by employers through the PromptTax system. Notice N-17-3 details the full announcement, which is reproduced below for your convenience.

FEDERAL – EXTENDED FILING DEADLINES

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As a result of the snowstorm, the IRS has extended certain filing deadlines due March 15, 2017, including partnerships and S Corporations.

In order to take advantage of this extension, taxpayers must file Form 7004 (Extension Request) on or before March 20, 2017. The taxpayer should write “Winter Storm Stella” on their form.

IR-2017-61 provides details the full announcement, which is reproduced below for your convenience.

NYS – CHANGE IN FILING DEADLINES

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As a friendly reminder, to match changes to federal income tax return deadlines, New York State has made the following changes to state income tax returns for calendar year 2016:

  • Partnerships: the new due date is 3/15;
  • S Corporations: no change;
  • Corporations: the new date is 4/15;
  • Trusts: no change.

Please further note the following:

  • The return deadline for IT-204-LL (for partnerships and limited liability companies which are disregarded entities, which have New York Source income or expense) is 3/15.
  • There were certain changes relating to the mandatory first installment payment for certain corporations.

The details of these changes are described under New York State  Department of Taxation and Finance Technical Memorandums TSB-M-16(9)C, (7)l and TSB-M-16(10)C, which are attached hereto.