The parking tax on nonprofit organizations has been repealed – and the IRS has issued guidance to obtain refunds for taxes already paid.
Enacted as part of the Tax Cuts and Jobs Act of 2017, IRC section 512(a)(7) imposed a 21-percent tax on any employer costs incurred to provide parking and transit benefits to employees. This controversial tax was retroactively repealed in December as a part of a comprehensive spending deal.
Colleges, universities, and other tax-exempt organizations seeking refunds, credits, or adjustments for unrelated business income tax paid and reported on Forms 990-T for 2017 and 2018 should file an amended Form 990-T, according to a January 21 post on the IRS website.
The IRS reminds organizations to clearly mark each revised return as “Amended Return – Section 512(s)(7) Repeal” at the top of the form. It directs filers to complete the returns as they normally would, along a few additional line-by-line instructions specific to processing the refunds for tax years 2017 and 2018.
The time limit for filing refund claims is whichever is later:
- Three years from the time the original Form 990-T was filed, or
- Two years from the time the tax was paid.
In early January, House Ways and Means Committee Chairman Richard E. Neal (D-MA) and Ways and Means Oversight Subcommittee Chairman John Lewis (D-GA) sent a letter to the IRS, urging it to quickly issue this guidance to help taxpayers begin the refund process for the repealed tax.