Answer: All perfect praise be to Allah the Lord of the Worlds. May His peace and blessings be upon our Prophet Mohammad and upon all his family and companions.
It is permissible to advance Zakat (pay it early) before the Zakat year (Hawl) is due, once the wealth has reached the Nisab (minimum threshold liable for Zakat), especially if advancing it serves the interest of the poor. This is based on the report from Ali (may Allah be pleased with him) that Al-Abbas asked the Prophet (peace be upon him) about advancing his Zakat before it was due, and he (the Prophet) permitted that. [Abu Dawood].
Shaykh Al-Islam Imam Shams Ad-Din Ar-Ramli (may Allah have mercy on him) said: "It's permissible to advance Zakat on annual wealth before the year (hawl) is complete, provided its hawl has begun and the nisab is met. This is because the Prophet (peace be upon him) permitted Al-Abbas (May Allah Be Pleased with him) to advance his Zakat, as narrated by Abu Dawood and Al-Hakim, who authenticated its chain of transmission. This is also because Zakat becomes due for two reasons, so it's permissible to advance it based on one of them, similar to advancing expiation (Kaffarah) before breaking an oath. The condition for the advanced payment to count as Zakat is that the owner remains eligible for the obligation until the end of the hawl, and the wealth remains until the end of the hawl. So, if the owner dies, or the wealth is destroyed, or it leaves his ownership – and it was not trade wealth – the advanced payment will not be valid. Furthermore, the recipient of the Zakat must remain eligible until the end of the hawl. If the recipient dies before then, or apostatizes, the amount paid to them will not be counted as Zakat, as they are no longer eligible at the time the Zakat becomes due." [Nihayat Al-Muhtaj/Vol.3/P.141] (Slightly paraphrased).
Furthermore, the advanced (paid early) amount before the completion of the hawl (Zakat year) is considered like the remaining wealth still in the possession of the Zakat payer. So, if the wealth falls below the nisab (minimum threshold) at the completion of the hawl, but if the advanced amount were to be added back, it would reach the nisab, then it must be included with it to complete it. Sheikh Al-Islam Al-Imam An-Nawawi (may Allah have mercy on him) said: "Our fellow scholars said: The advanced amount is joined with what is with the payer, taking the place as if it were in his possession. So, if he advanced one sheep out of forty, then the hawl passed, and no impediment arose, what he advanced would be valid. That sheep would be like the remaining ones in his possession in two aspects: in completing the nisab with it, and in its validity. And it is the same whether it remained in the possession of the poor person or was destroyed. Then, if the hawl is completed after the advancement, and the wealth is in its original state, it is valid as we mentioned. And regarding its estimation, if the remaining amount is less than the nisab (e.g., if he gave one sheep out of forty), there are two views: The correct view, which our companions definitively stated, is that the advanced amount is like the remaining amount in his possession, even for completing the nisab." [Al-Majmoo' Sharih Al-Muhadhdhab/Vol. 6/P.155].
In conclusion, the wealth advanced (paid early) is not deducted at the completion of the hawl (Zakat year), because it is considered like the remaining wealth in the possession of the Zakat payer. It completes the nisab (minimum threshold) and what was advanced is counted for him. And Allah The Almighty Knows Best.
