How to claim your parking tax (UBIT) refund
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How to claim your parking tax (UBIT) refund

1 year ago · 2 min read

The Taxpayer Certainty and Disaster Tax Relief Act of 2019 repealed I.R.C. Section 512(a)(7), which increased unrelated business taxable income by amounts paid or incurred after December 31, 2017 for qualified transportation fringes (AKA, the “parking tax”). This means exempt organizations that reported and paid the parking tax can claim a refund.

The not-for-profit industry requested timely clarification of the process for claiming these refunds, and the IRS responded. The IRS website posting on January 21, 2020 answers the following questions:

  • How do I claim a refund or credit for taxes paid for the repealed Section 512(a)(7) disallowed fringe benefits?

To obtain your refund or credit, you will need to file an amended Form 990-T.

  • How do I adjust my prior 990-T filing for the Section 512(a)(7) disallowed fringe benefits entry elimination on my amended Form 990-T?

For 2017 Form 990-T, you will:

  1. Complete the return as you originally did for all other items other than the disallowed fringe benefits entry.

  2. Reduce the entry on the line on which you originally included the 512(a)(7) amount by that amount. Per IRS guidance, this would have been on line 12 (Other income).

  3. Complete the rest of the Form 990-T after consideration of that revised entry.

  4. Include on the “Other” sub-line of line 45g (Other credits and payments) the amount of tax from line 48 (Tax due) of the original return (if any).

  5. If your changes result in the organization having made an overpayment, you should enter that amount on line 49 (Overpayment) line of the amended return, which you may request as a refund or credit on line 50.

For 2018 Form 990-T, you will:

  1. Complete the return as you originally did for all other items other than the disallowed fringe benefits entry.

  2. Enter “0” (zero) on line 34 (Amounts paid for disallowed fringes).

  3. Complete the rest of the Form 990-T after consideration of that revised entry.

  4. Include on the “other” sub-line of line 50g (other credits, adjustments, and payments) the amount of tax from line 53 (Tax due) of the original return (if any).

  5. If your changes result in the organization having made an overpayment, you should enter that amount on line 54 (Overpayment) line of the amended return, which you may request as a refund or credit on line 55.

  • What else do I need to consider for my amended Form 990-T?

  1. If you are amending only due to the repeal of Section 512(a)(7), write “Amended Return – Section 512(a)(7) Repeal” at the top of Form 990-T. If there are other amendments, write simply “Amended Return” at the top of the Form 990-T.

  2. For each amended filing, attach a statement indicating the line numbers on the original return that were changed and the reason for each change (for example, stating “repeal of Section 512(a)(7)”).

  • Do I need to file my amended Form 990-T soon to get a refund?

There is no rush to file these amended returns. The time limits for filing refund claims found in IRC Section 6511 apply to these refund claims. Typically, these time limits are three years from the date the original Form 990-T was filed or two years from the time the tax was paid, whichever is later.

For additional information, visit the tax and regulatory compliance topic or the IRS’s website for charities and nonprofits.

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