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Now homeowners can rush to prepay property taxes in Montgomery County too

Montgomery County Council members take the oath of office in 2015. (Katherine Frey/The Washington Post)

The Montgomery County Council broke its winter recess Tuesday to pass a bill allowing residents to prepay 2018 property taxes, a last-minute chance for homeowners in Maryland’s largest jurisdiction to mitigate the impact of a new federal cap on tax deductions.

Last week, the council went back and forth over whether it would rush to make the prepayment option — offered for years in Northern Virginia and elsewhere — available in the suburb of about 1 million people.

After an outpouring of interest from wealthy and middle-income homeowners, Council President Hans Riemer (D-At Large) announced Saturday that the council would hold a public hearing and vote on the bill the day after Christmas — a move multiple lawmakers called "unprecedented."

“Everybody here is making a good-faith effort to respond to a situation that was created by Congress,” said council member George L. Leventhal (D-At Large). “Everyone is scrambling at the last minute here to do the right thing.”

The Republican tax overhaul, which takes effect Jan. 1., caps deductions for state, local and property taxes at $10,000. Taxpayers in jurisdictions such as Fairfax County, Arlington and Alexandria, all of which already allowed prepayment, have rushed in recent days to pay next year's property taxes so they can deduct that amount from their 2017 federal tax filings.

In their effort to follow suit, Montgomery lawmakers returned from vacation — flying from Florida in at least one case, at government expense — and some county employees worked over the holiday weekend. Only council member Tom Hucker (D-Eastern County), who officials said was with a sick family member, did not attend Tuesday’s meeting.

The proposal passed 7 to 1 and took effect Tuesday afternoon after it was signed by County Executive Isiah Leggett (D). Council member Nancy Navarro (D-Mid-County), who voted for the legislation, called it "an 11th-hour tax bill."

Council member Craig Rice (D-Upcounty) voted against the bill, saying it would largely benefit those who could afford expert tax advice and come up with thousands of dollars within a few days.

Lawmakers encouraged the county finance office to promote the prepayment option as broadly as possible, including in multiple languages and in simple terms, saying they had already been contacted by residents who were confused about how to pay their taxes in advance.

In a release Tuesday afternoon, the county told residents that it will be up to the Internal Revenue Service to determine whether the prepaid property taxes can be deducted. The county urged taxpayers to consult their own tax advisers.

Payments must be postmarked by midnight Dec. 31 and submitted along with a Notice of Intent, which can be found, along with prepayment instructions, on the website of the county Finance Department.

The website encourages residents to mail checks rather than pay in person, to avoid long lines and parking issues. Other jurisdictions have warned that payment by check might not be deductible, however, if the payments do not clear before Jan. 1.

Initially, Montgomery lawmakers said they were skeptical of the benefits of a prepayment option, which they thought would apply only to the wealthiest homeowners. But council members and residents who gave public testimony Tuesday stressed that in Montgomery, this was a middle-class issue as well.

“We have heard from nonprofit employees, retirees, teachers, journalists and self-employed persons who say that the potential benefit is significant enough for them that they will figure out a way to put together prepayment funds,” Riemer said.

Robert Rivers, a Rockville resident who described himself and his wife as middle-class in testimony before the council, said the GOP tax law “doesn’t just affect the rich — it affects all of us.”

According to data from the county, Montgomery has about 340,000 residential and commercial property-tax accounts. Roughly 40 percent of federal income-tax returns filed from the county include deductions for state and local property taxes.

Elsewhere in suburban Maryland, Howard County allows prepayment of property taxes but Prince George’s County does not.

“It will not be perfect,” council member Roger Berliner (D-Potomac-Bethesda) said of Montgomery’s prepayment plan. “And so people will do the best they can, and I hope they understand we’re trying our best.”

Perry Stein contributed to this report.

Read more:

Here’s where you can prepay property taxes in the DMV

Five things to do before Jan. 1 to lower your tax bill

Yes? No? Montgomery County flip-flops on prepayment bill.