By Kari Jolly, Senior Tax Associate | Not-for-Profit Team
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 Internal Revenue Code 512(a)(7) is repealed to the time of enactment, paving the way for charitable organizations to recover taxes paid previously.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.
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!
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