GOP 2017 Tax Act Forces Nonprofits to Pay UBIT on Some Fringe Benefits

By: Philip Hackney In the new tax act of 2017, Congress imposed an unrelated business income tax on transportation and athletic facility fringe benefits that the nonprofit provides to its employees. I write because I suspect there are universities or hospitals or other large nonprofits out there (Pension funds maybe) that offer these types of benefits and are unaware that they need to be keeping track of these amounts and pay UBIT on these amounts at the end of the year. The law went into effect for taxable years starting January 1, 2017. In Section 13703 of the bill, Congress promulgated the following new rule: UBIT “shall be increased by any amount for which a deduction is not allowable under this chapter by reason of section 274 and which is paid or incurred by such organization for any qualified transportation fringe (as defined in section 132(f)), any parking facility used in connection with qualified parking (as defined in section 132(f)(5)(C)), or any…

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