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IRS cautions people prepaying property taxes

Posted at 1:18 PM, Dec 28, 2017
and last updated 2017-12-28 13:18:39-05

(CNN) - Hundreds of homeowners are racing to prepay their 2018 property taxes, hoping to take advantage of a popular deduction that will be reduced when the new tax law goes into effect on Monday. 

"I know we're going to get it in this year and we can write it off, but not sure about next year," Stephanie Christensen said.

According to the IRS, their efforts may not pay off. 

The last-minute rush coming amid confusion over one of the most controversial parts of the bill signed into law by president trump last week. A ten thousand dollar cap on deductions for state and local taxes that will disproportionately impacts homeowners in high-tax states like New York, California, Connecticut and New Jersey. 

The IRS is attempting to clarify who qualifies and cautions that prepaying property taxes could work under limited circumstances. To avoid the cap, homeowners must pay taxes that have been assessed this year - meaning that those who prepaid based on estimates will likely be ineligible. 

In Fairfax County, VA, officials already are preparing to potentially issue refunds.

In New York, Gov. Andrew Cuomo signed an executive order last week suspending measures in state law that could have prevented some residents from prepaying. 

"This is an economic civil war, pitting red states against blue states," Cuomo said.

New Yorkers are flooding tax offices, leaving tax collectors overwhelmed.

The IRS is expected to release additional guidance for other provisions in the tax law. 

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