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Headache Relief for Not-for-Profits; Transit and Parking Tax Repealed

by Kari Hedman

On December 20, 2019, the president signed H.R. 1865 which included a provision repealing the transit and parking tax on not-for-profit organizations. Tax relief and fewer administrative burdens is a great way to start the New Year!

The excise tax on transit and parking benefits for employees was imposed on tax-exempt organizations as part of the “Tax Cuts and Jobs Act.” Tax-exempt organizations were required to file Form 990-T to report these benefits as unrelated business taxable income (UBTI) and to make estimated tax payments for this tax throughout the year.

Since this repeal is retroactive to 2018, organizations will be entitled to refunds of taxes paid for 2018 and refunds of any estimated payments made for 2019. It’s as if the tax was never enacted in the first place.

When do we get our refunds for the transit and parking tax we paid for 2018?

As soon as the IRS issues guidance, we will be able to file amended Forms 990-T for 2018 to request refunds of taxes paid for 2018. Call us or check back here for updates about the process to get your refund.

What about 2019?

If you made estimated payments for transit and parking taxes in 2019, you will still need to file form 990-T to request a refund. We suggest waiting to file until the IRS instructions for this are issued so you can have the smoothest and speediest refund possible.

Contact us if you have any questions about the final steps for your specific organization. We can provide information, answer questions, and file the required returns. Now that the headache of tracking and paying the transit and parking tax is gone, you have more time and money to focus on your mission.


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