In December 2019, the unrelated business income tax on transportation benefits organizations provide to employees was retroactively repealed. Since then, not-for-profits have eagerly awaited IRS guidance on how to obtain refunds for amounts already paid toward this tax. This week, the IRS indicated organizations should file an amended Form 990-T for each year the tax applied. The IRS also provided instructions on how to complete those amended returns. If the not-for-profit has yet to file its most recent Form 990-T, it will need to file the return to request a refund of any previously applied tax or estimated tax payments.

The IRS published a list of steps organizations should follow when completing the amended returns, including:

  • Write “Amended Return – Section 512(a)(7) Repeal” across the top of page 1 of the return.
  • Remove the transportation benefit amount from the return (for 2017 returns, found on Part I, line 12; for 2018 returns, found on Part III, line 34)
  • Report the tax liability from the originally filed Form 990-T on the “other” sub-line in the payment section (for 2017 returns, Part IV, line 45g; for 2018 returns, Part V, line 50g)

You can find more information posted on the IRS website.

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