Congress gave nonprofit organizations an early Christmas present when the Taxpayer Certainty and Disaster Tax Relief Act of 2019 (The Act) was signed into law by President Trump on December 20, 2019. Besides funding the government through next September, the bill also included several tax provisions including a repeal of the very unpopular tax on nonprofits for providing parking and other qualified transportation benefits to their employees. Repealing the tax has been discussed ever since the original law was passed back in December 2017 as part of the 2017 Tax Cuts and Jobs Act.
The Act required nonprofits that met the requirements of the law to pay Unrelated Business Income Tax (UBIT) on parking and transportation benefits provided to employees. The tax was reported on Form 990-T and taxed at the rate of 21%. Unfortunately, the timing of the repeal comes after many nonprofit organizations have already filed their returns. Any nonprofit organization that reported and paid the tax on a Form 990-T should be eligible to receive a refund. Until further guidance is provided by the IRS, the organization may need to file an amended return to claim a refund. For more information on nonprofit tax issues, contact Richard Scoresby.
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