Churches and other historically tax-exempt organizations will now have to file federal and likely state income tax returns according to a recently unearthed provision in the newly instituted Tax Cuts and Jobs Act that applies the federal income tax to parking benefits for employees.
Hundreds of organizations are now calling for its repeal. “Tax practitioners who have evaluated Section 512(a) (7) generally believe that the result of this new provision is that tax‐exempt organizations that provide parking to their employees will be subject to unrelated business income tax on the cost of the parking provided. A nonprofit organization that simply allows its employees to park in a parking lot or garage that is part of the organization’s facilities will be subject to a tax on the cost of the parking provided,” the Evangelical Council for Financial Accountability explained in position statement included in a petition seeking to repeal the provision.
Note: The law will apply to all churches (as well as non-profits) that provide parking for their employees regardless of whether the employee is charged for parking or not.
The total number of church and nonprofit employees in the U.S. is approximately 15 million. That is 15 million parking spaces. The law applies to all non-profits of all persuasions.
Unless something is done to mitigate this issue, there will be a 21 percent income tax—yes, an income tax on churches and other nonprofits—and then there is the cost of preparing Form 990-T’s (Unrelated Business Income Tax form), the administrative effort required to file the annual form, and more. http://www.ecfa.org/Content/Nonprofit-Parking-Tax-Update
VERSE: “Let everything that has breath praise the LORD” Psalm 150
QUOTE: “A person who loves his job, will never work a day in his life.”
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