Publication

27 May 2020

IRS Guidance Released, Get Your Parking Tax Refunds Now

The IRS recently released guidance for tax-exempt entities to file a refund claim for the retroactively repealed “parking tax” paid in 2017 and 2018.  Beginning in 2017, tax-exempt entities were subject to Unrelated Business Taxable Income equal to the costs for providing qualified transportation fringe benefits to employees, which includes certain employee parking.  The Taxpayer Certainty and Disaster Tax Relief Act of 2019 passed as part of the Further Consolidated Appropriations Act, 2020, retroactively repealed this tax as though it never existed.

To claim a refund of this tax, a tax-exempt entity may file an amended Form 990-T.  The amended Form 990-T for 2017 Form 990-T is due by April 15, 2021.  The amended Form 990-T for 2018 Form 990-T is due by April 15, 2022.

The IRS released the following guidance to assist taxpayers with the refund claim process.

For a 2017 Amended Form 990-T

Complete the Form 990-T as originally filed, except:

  1. Write “Amended Return” on top of the Form 990-T. If the refund claim is only for the repealed parking tax, write “Amended Return – Section 512(a)(7)” on top of the Form 990-T (Section 512(a)(7) of the Internal Revenue Code is the section that was repealed).
  2. Reduce the original entry on the line on which you included the Unrelated Business Taxable Income for the costs of qualified transportation fringe benefits (generally line 12, Other Income).
  3. Complete the rest of the Form 990-T based on that revised entry.
  4. Include on the “Other” sub-line of line 45g (Other credits and payments) the amount of tax from line 48 (Tax due) on the original return (if any).
  5. If the changes result in an overpayment, enter the amount on line 49 (Overpayment) and request a refund or credit on line 50.
  6. Attach a statement to the Form 990-T indicating the line numbers that changed and why (e.g., stating “repeal of Section 512(a)(7)”).

For a 2018 Amended Form 990-T

Complete the Form 990-T as originally filed, except:

  1. Write “Amended Return” on top of the Form 990-T. If the refund claim is only for the repealed parking tax, write “Amended Return – Section 512(a)(7)” on top of the Form 990-T.
  2. Enter “0” (zero) on line 34 (Amounts paid for disallowed fringes).
  3. Complete the rest of the Form 990-T based on that revised entry.
  4. Include on the “Other” sub-line of line 50g (Other credits, adjustments, and payments) the amount of tax from line 53 (Tax due) on the original return (if any).
  5. If the changes result in an overpayment, enter the amount on line 54 (Overpayment) and request a refund or credit on line 55.
  6. Attach a statement to the Form 990-T indicating the line numbers that changed and why (e.g., stating “repeal of Section 512(a)(7)”).

For more information on other changes contained in the Further Consolidated Appropriations Act, 2020, you may read our previous client alert here.

If you have any questions on the above, please contact a member of the Miller Johnson employee benefits practice listed to the left.