Kane County assessor: No guarantee your tax prepayment will benefit you

  • Kane County clerk's office employee Matt Nelson provided property tax prepayment assistance at the Kane County treasurer's office last month.

    Kane County clerk's office employee Matt Nelson provided property tax prepayment assistance at the Kane County treasurer's office last month. Courtesy of Kane County Clerk's Office

Updated 1/5/2018 10:19 PM

Thousands of Kane County residents lined up in below-freezing temperatures to prepay property taxes, but confusion on several levels leaves uncertainty about any actual financial benefits from that effort.

The stampede to the county treasurer's office followed a new federal tax law that caps deductions homeowners can claim for state and local taxes at a combined $10,000.


There was no limit before the new law. County residents who claim deductions beyond that cap rushed to get one last benefit from the old tax law.

As a result, the treasurer's office collected more than $40 million in prepayments in the final days of 2017.

County staff members fielded a barrage of questions about the tax benefits of prepayment.

Most of the answers only yielded more questions. Staff members referred county residents to congressman Randy Hultgren's office for a definitive interpretation of the tax law changes the congressman supported.

Asked what they told people who called, Hultgren's office supplied a copy of an IRS memo they said contained "clear examples" of how to handle property tax prepayments.

Hultgren's staff members said it's also the responsibility of county assessors to implement the IRS regulation.

Supervisor of Assessments Mark Armstrong said that's not true.

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"We do what we do, and that's follow Illinois law," Armstrong said. "We have no authority to tell the IRS what the tax code means."

Armstrong points to one key phrase in the IRS' public statements that may determine any local benefit. The statement, in part, reads:

"In general, whether a taxpayer is allowed a deduction for the prepayment of state or local real property taxes in 2017 depends on whether the taxpayer makes the payment in 2017 and the real property taxes are assessed prior to 2018."

The phrase "assessed prior to 2018" is what causes the confusion. Armstrong's office completed the valuation of properties before 2018.

But state officials must also issue an equalization factor before those valuations are locked in place.

"There is no final assessed value in the entire state of Illinois right now because that equalization factor hasn't taken place," Armstrong said.


It's also possible the IRS means "billed" when it uses the word "assessed," Armstrong said. The county will not issue any tax bills until April.

"It's all kind of vague," he said. "They are using the word 'assessed,' but from the context, it is unclear if they mean the Illinois legal version of 'assessed' or not. It doesn't sound like the same context to me."

County officials are divided on what the benefit of prepaying property taxes will be.

County board Chairman Chris Lauzen said he prepaid his taxes and expects to net a $1,500 tax benefit because of it.

In contrast, Armstrong did not prepay his taxes.

"I spent a lot of time thinking about it," he said. "And the amount of money I might save compared to the effort of moving things around to pay it was not something that I thought was entirely the right thing to do."

Armstrong said only Hultgren and his colleagues in Congress can provide the ultimate final say on tax prepayment benefits.

"Providing clarity for a situation like this is what we pay them for," Armstrong said.

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