Refunds for Transportation Benefits Tax: What You Need to Know

Posted on Jan 23, 2020

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2019, the unrelated business income tax on transportation benefits organizations provide to employees was retroactively repealed.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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