Business & Finance

Franklin Township: What to Know if You Want to Pay Property Taxes Early (UPDATE)

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To prepay 2018 taxes or not seems to be the question this week.
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FRANKLIN TOWNSHIP, NJ - The mayor recently provided local news outlets with the following message. 

"The municipal building will be open tomorrow from 8:30 to 12:30 for the purpose of tax collection in an ongoing effort to accommodate people who wish to pay their property taxes early," Mayor Phil Kramer said in an email statement. 

Original article:

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Since the sweeping new Tax Law has been passed and signed by President Trump, millions of dollars in prepaid 2018 property taxes have swamped local Tax Collectors. There has also been confusion on timing and deductibility. TAPinto Franklin Township has the answers on both. 

Earlier this week, Governor Christie issued Executive Order No. 237 which basically states that any payment that is postmarked by December 31st will count towards 2017. His order is here:

From the Office of the Governor:

Trenton, NJ -  Governor Chris Christie today signed the following Executive Order:

Executive Order No. 237 - Directs the Director of the Division of Local Government to notify municipalities to accept payments for 2018 property taxes in calendar year 2017 and require them to credit those payments as received in 2017 if the payment is postmarked on or before December 31, 2017.

“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," Governor Christie said. "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 full order is here: http://nj.gov/infobank/circular/eocc237.pdf

Additionally, there is confusion as to how the IRS will address the deductibility of prepayments. They discuss the issue in the following link and identify the difference between estimating a bill and the actual billed amount. Most municipalities like Franklin Township have identified the first two quarters of the year but not the third and fourth quarter.

Notably, from the IRS: "A prepayment of anticipated real property taxes that have not been assessed prior to 2018 are not deductible in 2017.  State or local law determines whether and when a property tax is assessed, which is generally when the taxpayer becomes liable for the property tax imposed."

You can read about their guidance below and be sure to consult your tax advisor or other professional for advice on how to proceed. Folks who use the Alternative Minimum Tax (AMT) and those who have their payments tied to their mortgages should pay especially close attention.

Read the IRS guidance here: https://www.irs.gov/newsroom/irs-advisory-prepaid-real-property-taxes-may-be-deductible-in-2017-if-assessed-and-paid-in-2017

The mayor also provided some additional information to local media outlets earlier this week. 

The Township does not provide estimated tax payments for 2018 other than the first two-quarters of taxes which have already been billed.

Payment of those two quarters prior to the end of the year will be accepted.  

Any payments in excess of those two quarters cannot be credited against payments for taxes not yet billed and may be refunded by the Tax Collector.

Please note for those taxpayers whose taxes are paid by a mortgage company or escrow agent we highly recommended that you contact the mortgage company or escrow agents to confirm that you will be making advanced payments.

We encourage any taxpayer who is delinquent on their taxes to become current prior to the end of the year to take full advantage of the property tax deduction on their Federal Income Tax.

"Taxes are very case specific so above all please consult a tax professional to address your exact situation," Kramer said in an email statement. 

Taxes can be paid online by clicking here

The township also issued an alert earlier today warning on possible long waits due to residents choosing to pay their 2018 taxes early. Instructions on what to do can be found below:

  • Online payments can be made at this link -PLEASE NOTE: 1ST QUARTER TAXES WILL BE LISTED AS DELINQUENT. THEY ARE NOT DELINQUENT THIS IS AN ERROR IN THE SYSTEM RESULTING FROM 2 QUARTERS BEING AVAILABLE FOR PAYMENT AT ONE TIME. 
  • If paying by check, a drop box is available in front of the police station for after-hours payments or may be dropped in the mail slot on the door of the Collectors office in the municipal building
  • By Mail:

Township of Franklin
Tax and Water Collection

PO Box 5059
Somerset, NJ 08875

Earlier this month local resident and Somerset County Freeholder Brian D. Levine discussed how the law would impact residents of the Garden State.

TAPinto Franklin Township is independently owned and operated by  Malik A. Lyons FHS Class of 93’ Graduate. 

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