This article provides an update on filing an amended Form 990-T following repeal of unrelated business income tax for fringe transportation benefits. For assistance filing your return, contact CBM Not-for-Profit Practice Director Dan Weaver at 301.986.0600 or by clicking here.
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On January 21, the IRS issued guidance for how not-for-profit organizations can claim a refund or credit for unrelated business income tax related to fringe transportation benefits, for which they became liable under Internal Revenue Code (IRC) Section 512(a)(7). Tax-exempt organizations wishing to claim the credit or refund after the repeal of the tax under the Taxpayer Certainty and Disaster Tax Relief Act of 2019 may file an amended Form 990-T for tax years 2017 and/or 2018.
The IRS recommends that tax-exempt organizations filing an amended Form 990-T write “Amended Return – Section 512(a)(7)” across the top of the amended filing.
Guidance for Amended 990-T Filings for 2017 and 2018
There are some slight differences for how tax-exempt organizations should file amended returns for tax years 2017 and 2018 including the following:
2017
• Subtract the overall tax amount for which your organization claimed liability on the original return by the amount of your obligation under 512(a)(7). Tax-exempt groups that followed the Recent Developments article posted on IRS.gov will find this amount on line 12.
• Enter the amount of tax you entered on line 48 of your original 990-T on line 45g (“Other”) of the amended return.
• Any overpayment amount should be entered on line 49 (“Overpayment”), which you can then request as a refund or credit on line 50.
The rest of the amended Form 990-T should be completed based on the above-mentioned adjustments.
2018
• Enter “0” on line 34 (Amounts paid for disallowed fringes).
• Write the amount of tax entered on line 53 of your original return on the “Other” subline of line 50g in your amended return.
• Any overpayment amount should be entered on line 54 (“Overpayment”), which you can then request as a refund or credit on line 55.
The rest of the amended Form 990-T should be completed based on the above-mentioned adjustments.
Additional Guidance
In addition to filing the amended Form(s) 990-T, tax-exempt organizations should attach a statement breaking out the changes made (including specific line numbers) from the original returns including the reason for each change [in the case of the IRS guidance released on January 21 for “the repeal of Section 512(a)(7)”].
Deadline to File an Amended Claim
Tax-exempt organizations filing an amended Form 990-T due to the repeal of Section 512(a)(7) must still abide by the deadlines and claim timelines issued under IRC Section 6511. These time limits are either three years from the filing date of the original Form 990-T or two years from the date the tax was paid (whichever was later).
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Councilor, Buchanan & Mitchell (CBM) has been monitoring the issue of UBIT for fringe taxation benefits and providing guidance to not-for-profits since late 2017. Our not-for-profit team is available to consult with your organization should you need assistance in reviewing your eligibility for a refund/credit or filing an amended Form 990-T. Contact our team at 301.986.0600.
Guidance posted by the IRS on its website can be found by clicking here.
Councilor, Buchanan & Mitchell (CBM) is a professional services firm delivering tax, accounting and business advisory expertise throughout the Mid-Atlantic region from offices in Bethesda, MD and Washington, DC.
