WOODSTOCK – An unprecedented number of McHenry County residents stood in lines in the bitter cold last week to do something most people hate to do: pay property taxes.
The lines out the door of the McHenry County Treasurer’s Office were filled with people hoping to take advantage of a tax deduction that will be capped under a sweeping federal tax code overhaul signed by President Donald Trump.
But after an IRS advisory warning that prepayments could be deducted only in certain circumstances, there has been confusion among McHenry County residents and officials about whether they’ll be able to deduct their property taxes after all.
“I really don’t know,” said McHenry County Treasurer Glenda Miller, who estimates more than 6,500 residents visited her office last week to beat the Dec. 29 deadline to prepay property taxes. “It really has put all these people in turmoil and confusion.”
Although the treasurer has given property owners the option of paying their taxes early for years, the mad dash to the treasurer’s office was in response to a provision in a federal tax overhaul bill called the Tax Cuts and Jobs Act – a law that will cap homeowners’ property tax deductions at $10,000 for 2018.
Last week, Miller welcomed McHenry County residents to prepay their property taxes for up to two years to get the maximum, uncapped deduction, but the IRS advisory warned that filers could avoid the cap only by paying property taxes already assessed in 2017.
Although Miller is confident McHenry County residents will be able to deduct their 2017 property taxes, she can’t say the same about property taxes prepaid for 2018. That’s why she put together a separate folder filled with checks written to pay for 2018 taxes so she could send them back.
About 75 McHenry County residents tried to prepay their taxes for 2018. The treasurer’s office has not tallied a precise dollar amount for those checks, but the payments total between $3 million and $4 million, Miller said.
“I’m going to return [the checks] to the property owners,” she said.
Property taxes for 2017 are due in two installments this year: one in June and the other in September. In past years, very few McHenry County residents paid their property taxes early.
In 2014, 40 McHenry County residents prepaid their property taxes, coughing up a total of $363,000. In 2015, that number jumped to 65, bringing $824,300 to the treasurer’s office. In 2016, 54 people paid $650,979.
As of Friday morning, Miller had deposited $3.4 million in early property taxes in the bank, with an additional $5 million ready to be deposited. As of Friday night, Miller and her staff still had boxes and piles of checks and paperwork to process.
Miller expected the total of prepaid McHenry County property taxes to reach between $15 million and $20 million.
That money will sit in a bank account with 0.49 percent interest until it’s time to distribute that money to tax districts, which include schools, townships, villages and local authorities.
“We’ve been swamped,” Miller said.
Some McHenry County residents avoided the rush to pay property taxes early, unsure whether they would benefit.
“I didn’t go pay my taxes early because who knows if it is deductible,” said Norman Vinton, a McHenry County assistant state’s attorney and longtime county resident. “I can’t tell you if it will be deductible.”
Others aren’t really concerned whether their 2017 property tax payments are deductible.
“I had the money available, so it’s nothing lost,” said Marlene Noe, a Dunham Township resident. “If it’s not deductible, well, so be it.”
Michael McCarthy, a 30-year Crystal Lake resident, paid his property taxes early and was not confused about the process. He was annoyed that residents had to wait in freezing temperatures.
“When I first got there, there were probably 20 people standing outside, so I pulled into the drive-thru lanes – but they closed the drive-thru and made people stand outside,” McCarthy said. “It was 3 degrees out. That was annoying.”
The treasurer’s office did not expect such a rush.
“They popped this up at the last minute,” Miller said.