By Keiter CPAs
Tax Exempt Organizations Expecting Refunds Due to the Nonprofit Parking Tax Repeal
On December 20, 2019, the Taxpayer Certainty and Disaster Tax Relief Act of 2019 (the “Act”), was signed into law, repealing a wildly unpopular provision of the 2017 Tax Cuts and Jobs Act (“TCJA”) which assessed unrelated business income tax on charitable organizations for parking benefits provided to their employees. Internal Revenue Code 512(a)(7) is repealed to the time of enactment, paving the way for charitable organizations to recover taxes paid previously. Guidance from the IRS is expected regarding the process to apply for refunds.
Other Impacts
In addition to repeal of 512(a)(7), the Act also simplified the calculation of net investment income excise tax assessed to private foundations. IRC Section 4940(a) set forth a two-tiered system for calculating the excise tax at 1% or 2%, which is now replaced by a flat 1.39%.
The Not-For-Profit Opportunity Advisors at Keiter will provide updates regarding the refund application process as guidance becomes available. Stay tuned!
Questions on how these changes may impact your not for profit organization? Contact your Keiter representative or Email | Call 804.747.0000. We are here to help.
Additional Tax Resources
About the Author
Keiter CPAs
Keiter CPAs is a certified public accounting firm serving the audit, tax, accounting and consulting needs of businesses and their owners located in Richmond and across Virginia. We focus on serving emerging growth businesses and companies in the financial services, construction, real estate, manufacturing, retail & distribution industries and nonprofits. We also provide business valuations and forensic accounting services, family office services, and inbound international services.
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