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UBIT repeal on transportation benefits for nonprofit organizations
In December 2017, the Tax Cuts and Jobs Act (TCJA) added a provision for nonprofit employers that makes commuter benefits to employees subject to the unrelated business income tax (UBIT). That portion of the TCJA is now repealed retroactively.
What this means
Nonprofit organizations providing a transportation benefit to employees no longer have to include the amount of that benefit in their calculation for UBIT.
Since the UBIT repeal on transportation benefits is retroactive, entities that have paid the tax on these benefits are probably eligible for a refund.
UBIT repeal only
This is the only roll-back of the employer tax provision on Section 132 transportation benefits amended in the TCJA.
The change does not involve for-profit organizations.
Contact your tax professional
Nonprofits should contact a tax professional on the specifics of this tax repeal and how a refund of additional UBIT already paid should be pursued. Core Documents does not give tax or other legal advice and provides this update as an informative update to our clients.
Learn more
If you believe your organization and its employees may be a good fit for a Section 132 transportation plan, a simple plan document is all you need to make it tax-free for employees. Contact us today to get started.
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