By Samantha Ramirez, CPA, Tax Manager
In December 2019, the Taxpayer Certainty and Disaster Tax Relief Act was signed into law, and retroactively repealed the “parking tax” that had taken the not-for-profit (NFP) community by surprise. This is good news for exempt organizations that were subject to unrelated business income tax (UBIT) solely because they provided their employees transportation fringe benefits. NFPs will no longer owe UBIT for these disallowed benefits, and for organizations that already paid the tax, refunds can now be claimed!
To claim a refund for taxes paid, the organization will be required to file an amended return. The IRS has provided specific instructions on how to claim a refund, which includes writing, “Amended Return – Section 512(a)(7) Repeal” at the top of the amended return. Complete instructions can be found on the IRS website: How to Claim a Refund or Credit of Unrelated Business Income Tax. As the statute of limitations for refund claims will apply, be sure to file your amended returns within three years from the time the original Form 990-T was filed, or two years from the time the tax was paid, whichever is later. If your organization would like help with filing these amended returns, please contact our Nonprofit Group, we will be more than happy to help!