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Compliance Briefing Center

Regulatory Updates

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What’s New in the New Year? – Updated


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February 20, 2020

One of the items noted in our previous Compliance Alert “What’s New in the New Year?” pertained to the repeal of unrelated business income tax (UBIT) on nonprofit organizations for parking and transit expenses.

An aspect of the repeal was that it was retroactive, as if the tax was never in the original law. The repeal included amounts incurred or paid after December 31, 2017. Now the question arises concerning the steps to take in order to recoup the so called “Transit Taxes” that were remitted with previous filings.

The IRS has published “How to Claim a Refund or Credit of Unrelated Business Income Tax (UBIT) or adjust Form 990-T for Qualified Transportation Fringe Amounts.” There are separate instructions for claiming 2017 and 2018.

It starts with writing “Amended Return” at the top of Form 990-T and involves several steps. The process is fairly simple. However; please keep in mind that 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 time the original Form 990-T was filed or two years from the time the tax was paid, whichever is later.

The information contained in this memo is not intended to be legal, accounting, or other professional advice. We assume no liability whatsoever in connection with its use, nor are these comments directed to specific situation.