Did your nonprofit file a Form 990-T to pay the new income tax on expenses for providing transportation benefits to your employees? If so, it’s time to request a refund. The deadline is two years from the date you paid the tax or three years from the time you filed the form, whichever is later.
The Tax Cuts and Jobs Act of 2017 included provisions that required nonprofits to pay an extra unrelated business income tax on transportation benefits provided to employees – things like bus and transit passes and even parking. The tax applied to benefits funded directly by the organization and to any pretax payroll deductions employees made to pay for these items themselves. Thanks to aggressive lobbying, the tax was repealed in December 2019 as part of the Taxpayer Certainty and Disaster Tax Relief Act.
To request a refund, you’ll need to file an amended Form 990-T, following these three steps:
- Write “Amended Return” at the top of the form. If the amended return is being filed only to claim a refund, credit, or adjust information due to the repeal of Section 512(a)(7), write “Amended Return – Section 512(a)(7) Repeal.”
- Complete the form as you originally did, with some changes, as described here.
- Attach a statement indicating the line numbers on the original return that were changed and the reason for each change (for example, stating “repeal of Section 512(a)(7)”).
While no one can rush the IRS, several members of Congress did request an expedited process for the refunds.
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