On December 17, 2019 Congress rectified a two-year old problem, when they repealed the nonprofit tax on transportation benefits provided by employees. The original law, the Tax Cuts and Jobs Act (“TCJA”) enacted during December 2017, imposed 21% tax on these benefits. During 2018, NYS repealed the tax for State purposes and now the Federal government has done the same.
This new legislation is retroactive to the original date of ratification, which was January 1st, 2018. Nonprofit organizations will be eligible for a refund of any taxes paid over the last two years, however, the refund process is not clear as of yet.
This has been an issue that the sector has been fighting since it was first enacted. It’s good to see that someone was listening.