On April 15th, tens of thousands of not-for-profit organizations will have tax bills come due. "How can that be?" you ask, "I thought most non-profits have tax exempt status." Well, effective with the 2018 tax season, you're wrong.
The Tax Cuts and Jobs Act (TCJA,) enacted in late 2017, saw some of the most significant changes to the tax code in 30 years. Among those changes is one in particular that we weren't expecting – the Unrelated Business Income Tax on the expenses of nonprofit organizations providing transportation benefits to their employees.
As you may already know, under the new law not-for-profits must pay a 21% tax on benefits provided to employees such as paid parking and transit fees. They are also taxed on the amount their employees have voluntarily withheld to pay for their own parking or transit. This tax will profoundly impact charitable non-profits, houses of worship, foundations and non-profit associations. Some may even cease to exist under the weight of this new burden.
The new tax on historically tax-exempt organizations represents a sea change in U.S. tax policy and will adversely affect many non-profits and their ability to serve the public and fulfill their mission. Currently, there is a bipartisan push to repeal this portion of the new tax law. For this reason, we ENCOURAGE YOU TO:
- SIGN YOUR ORGANIZATION ONTO THE NONPROFIT COMMUNITY LETTER BEFORE CLOSE OF BUSINESS WEDNESDAY, MARCH 27TH - READ THE LETTER | SIGN YOUR ORGANIZATION ONTO THE LETTER
- CALL, WRITE AND TWEET YOUR SENATORS OR REPSENTATIVE. Make them aware of your opposition to this unfair and unjust component of the tax code. Ask them to repeal the Transportation Tax on Not-for-Profit organizations.
- FORWARD THIS MESSAGE ON TO YOUR COLLEAGUES, BOARD MEMBERS, CLIENTS AND FRIENDS.
We urge you to take action and help spread the word about this unjust change to the tax code. Together, we can help keep much needed funds with the not-for-profit organizations that serve our community and make our world a better place.