Unrelated Business Income Tax (UBIT)

In 2017, Congress passed the Tax Cuts & Jobs Act (TCJA) which included some changes to the Qualified Transportation Fringe Benefit (QFTB) - especially for tax-exempt organizations. Within the bill, there is language that effectively provides that the unrelated business taxable income of an exempt organization be increased by the amount of the benefit (pre-tax and subsidy) provided to employees. As a result, non-profits (hospitals, universities, museums, etc.) providing a commuter transportation benefit will be hit hard, as they now will have to pay an unrelated business income tax (UBIT), equal to 21% of the total value of the transportation and parking benefits provided as a subsidy to employees or funded through a pretax payroll deduction.The Bicycle Benefit was eliminated by the TCJA.

The Association for Commuter Transportation has been working to collect feedback from members on the impact of this change and advocate for the repeal of UBIT.

 

ACT Resources

 

 

 

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