This is a new scenario for us regarding and escrow account:

The loan is set up to escrow for property taxes which has been fine over the last few years, Now the state in which the property is located has a state aid program that assists with property taxes. Our loan will not have property taxes to pay out for 2020 and 2021. Do we do an annual analysis? This would result in a large payout to the customer only to have to recoup it back in the next year? Do we continue to collect in the loan monthly payments for escrow?

Any thoughts are appreciated.

You cannot escrow for payments that are not anticipated to have to be paid during the escrow analysis year.