By Michael Dutkovich, Esq.
Congress recently passed legislation repealing part of the Tax Cut and Jobs Act which required tax-exempt organizations, including churches and schools, to pay an unrelated business income tax (“UBIT”) on parking benefits provided to employees of these tax-exempt organizations. This repeal is of significant benefit to tax-exempt organizations as the amount of tax could have been 21% of the benefit provided to employees starting as of January 1, 2018. Tax-exempt organizations will no longer need to pay this UBIT.
This legislation also enables tax-exempt organizations to request a credit or refund from the IRS for prior payment of UBIT resulting from parking benefits provided to employees reported on the Form 990-T for 2017 and 2018. Tax-exempt organizations may be able to claim this credit or refund by filing an amended Form 990-T for 2017 and 2018. It is important to note there are time limits for requesting the credit or refund. According to the IRS’ website, “Typically, these time limits are three years from the time the original Form 990-T was filed or two years from the time the tax was paid, whichever is later.” More information on this matter can be found by visiting the IRS’s website at: https://www.irs.gov/forms-pubs/how-to-claim-a-refund-or-credit-of-unrelated-business-income-tax-ubit-or-adjust-form-990-t-for-qualified-transportation-fringe-amounts.
Please do not hesitate to contact us if you have any questions on this matter.