Nonprofit
How Nonprofits Can Stay Aligned and Adapt as Conditions Change
Stronger alignment and shorter planning cycles help organizations stay focused on what matters most while adjusting more effectively to changing conditions.
AAFCPAs is excited to share with our nonprofit clients and their dedicated employees, on December 17, 2019, the House of Representatives passed an agreement (cited as the Taxpayer Certainty and Disaster Tax Relief Act of 2019, originally introduced in June 2019), which includes much welcomed provisions to repeal the tax on nonprofit transportation fringe benefits as well as a flat rate private foundation excise tax.
Repeal of Increase in Unrelated Business Income for Certain Fringe Benefit Expenses Paid
The bill retroactively rescinds the original Tax Cuts and Jobs Act’s provision increasing unrelated business income for nonprofits who provide fringe benefits under IRC Section 512(a)(7). It is clear, in the agreement passed by the House on December 17, 2019, that this provision is retroactively repealed, but no process has been defined for organizations to apply for refunds for amounts previously paid.
Change in Private Foundation Excise Tax
The bill also amends the excise tax rate for private foundations by striking the two percent rate and reduced one percent rate and inserting a flat 1.39% rate for all foundations, regardless of distributions. This change would apply to taxable years beginning after the date of enactment for the plan.
The language in the bill is not yet finalized and still needs to be signed into law. However, AAFCPAs advises clients affected by these or other provisions to begin planning now for the changes.
Related Articles
- AAFCPAs Urges Repeal of Nonprofit Transportation Tax
- Viewpoint: Nonprofits should stay vocal about transportation ‘tax’; authored by AAFCPAs’ Co-Managing Partner, Carla McCall, and published in the Boston Business Journal
As always, the tax practice of AAFCPAs will continue to monitor the legislative process and keep you informed as significant changes occur, or provisions become clarified. If you have any questions please contact: Christopher Consoletti, Esq. at 774.512.4180, cconsoletti@aafcpa.com; Josh England, Esq., LLM at 774.512.4109, jengland@aafcpa.com; or your AAFCPAs Partner.
