A number of tax measures are included in the disaster relief packages moving quickly through Congress. NACUBO, working with several higher educations and charitable organizations, is closely tracking and advocating for tax relief measures for colleges and universities.
Clarification on Postponement of Tax Deadlines
NACUBO, along with 14 other higher education associations, has urged Treasury Secretary Steve Mnuchin and IRS Commissioner Charles Rettig to clarify that exempt organizations, including colleges and universities, will be afforded the same 90-day extensions for filing and paying of taxes announced for corporate and individual taxpayers due to the coronavirus crisis.
The March 20 letter noted IRS Notice 2020-17 and a subsequent March 20 announcement from Mnuchin, which specified a postponement from April 15 to July 15 for filing and payment of corporate and individual taxes but did not address similar relief for tax exempt organizations. NACUBO noted that colleges and universities file and pay unrelated business income taxes, as well as excise taxes on executive compensation and net investment income.
In addition to current pandemic-related pressures on institutions, the IRS has yet to publish final guidance for institutions related to the calculation of those taxes. NACUBO urged officials to grant a 90-day filing and payment extension for exempt organizations, in accordance with their fiscal year filing dates and extension dates.
Relief for Visiting Scholars and Students
NACUBO also urged policymakers to extend relief to international scholars and students who may be unable to leave the United States due to virus-related travel restrictions. Otherwise, they may be penalized as tax residents because they inadvertently exceed their permitted amount of time in the U.S. under the substantial presence test.
Employer Payroll Tax Credits for Public Institutions
In a March 19 letter, NACUBO urged the congressional tax-writing committees to extend the payroll tax credits in the Families First Coronavirus Response Act to public colleges and universities.
While public institutions fall under the act’s definition of employers required to provide expanded paid sick and family leave, they are expressly excluded as state government instrumentalities from the corresponding payroll credits that offset a portion of these additional costs. Higher education institutions are some of the country’s largest employers, with a collective workforce of more than 2.5 million people. NACUBO cautioned lawmakers against putting public institutions on unequal financial footing from their private nonprofit and proprietary counterparts, strongly urging them to extend the payroll tax credits to public two- and four-year colleges and universities.
Developing Tax News
As Congress tries to reach agreement on the Coronavirus Aid, Relief and Economic Security (CARES) Act, NACUBO is closely tracking additional employer tax measures as well provisions for individual taxpayers, including an expanded above-the-line charitable giving deduction.
NACUBO will continue to report on federal tax announcements relevant for colleges and universities.
Other Advocacy Efforts
On March 22, NACUBO sent a letter to Senate and House leadership urging emergency relief for students and institutions to ease the financial implications of the pandemic crisis, including:
- Access to low-cost capital
- A technology implementation fund
- Administrative relief
- Longer-term tax relief for students and institutions
Further coronavirus-related regulatory guidance for colleges and universities is available on NACUBO's Coronavirus Resources page, and you can read more about ongoing Capitol Hill and federal agency responses to address the virus here.