I know this may come up a lot, and I am quite early for even being concerned but here goes!

My son is showing all the signs of being gifted. At 12 months old he understands most of what we say and can respond to probably 50 commands (everything from getting his toothbrush and brushing his teeth when we ask to closing doors and putting toys away). He has a great memory and can see an action once and repeat it on his own, has a long concentration, high level of energy and is going things well beyond his age (turning pages in books - has been since 3 months old; understand the proper uses for things, for instance we just gave him a play golf set 2 days ago - he will hit the golf balls with the golf club even if there are other balls on the floor he will only hit the golf balls even though we never told him to hit only the golf balls). Okay, I'm rambling.
We have been anxious about school anyway since my son was born in Oct. and the cut off birthdate they use for school in our state is Sept. 1. He has already been advanced in his daycare, so he is used to being around older children (at 9 months old he was promoted a class with 18 months olds and thrived in that atmosphere). Since he is around older children he is of course learning quickly.
Well, my state will NOT test a child for early entry into kindergarden. But it gets worse, since my child won't turn 5 until Oct, they will not let him test for kindergarden until the following year. And I was told that no matter how well he does on the test, he will HAVE to go to Kindergarden. So, it doesn't matter if he is reading, doing math, or finding new planets with a telescope (being funny here) he HAS to go to Kindergarden and then the next year he will HAVE to go to first grade. They will not consider advancing him until 2nd grade.
I asked what happens if my son already knows how to read and count when he enters kindergarden - they told me they will find "additional work" for him to do but he will have to stay in the class. I seriously doubt a teacher will want to have a curriculum just for him if that were to happen. In addition, a good friend was a kindergarden teacher here and said she had kids in her class that weren't even potty trained - let alone could identify letters of the alphabet. There is no way she would have been able to give attention to a gifted child.
Even the private schools around here will not test for early admittance into K programs - is homeschooling our only option? I am concerned because my son can already identify some letters - and not from up trying to "teach" him, he just likes books and phonics toys. I just can't imagine keeping him out of school for an additional year because of his birthdate - then forcing him to sit through kindergarden where the worse case scenario is he will do nothing, and the best case he will be sitting in a corner by himself doing different work from the other kids.

Am I panicing for no reason?