Reply To: I heard that my organization will have to pay unrelated business income tax and file an unrelated business income tax return on any transportation benefits that they give to our employees. Is this true?
The new tax law referred to as the Tax Cuts and Jobs Act (TCJA) made substantial changes to business deductions for expenditures viewed to be inherently personal in nature. One of those changes has to do with deductions for qualified transportation fringe benefit (QTFB) expenses such as pre-tax transit checks. If a Not-For-Profit organization provides these benefits on a pre-tax basis to its employees it will be required to file an annual Form 990-T, “Exempt Organization Business Income Tax Return” and pay applicable taxes.