Gene Tagaki at Non Profit Law blog tweeted about IRS guidance for non profits that are now faced with having pay to taxes on the parking they offer employees.
If you didn’t know that you had to pay taxes on free or subsidized parking now….well you aren’t alone. It came as a surprise to a lot of people at the end of last year. Basically, whether you are an employer or an employee where free or subsidized parking is part of the employment package, there is tax to be paid.
The new rules aim to help taxpayers calculate the amount of parking expenses that aren’t tax deductible anymore since the passage of the TCJA. The guidance also is supposed to help tax-exempt organizations and their accountants figure out how the now nondeductible parking expenses can either create or increase unrelated business taxable income, or UBTI for short.
If any of this concerns you, you may want to read the article and chat with your accountant. The new guidance from the IRS is causing a lot of grumbles due to how late it is. (Mea culpa, I meant to post on it months ago, too) A lot of non-profit groups were hoping for a repeal of these rules rather than tardy details on how to comply with them.