How to Allocate Your Upcoming UBIT Refund
If you paid UBIT on employee parking or transportation, you should expect a refund
As part of a massive, bipartisan year-end spending and tax package signed into law in December, Congress repealed a section of the 2017 tax law that required associations and other tax-exempt organizations to pay a 21 percent unrelated business income tax (UBIT) on employee benefits, such as parking and transportation. As a result, the Internal Revenue Service (IRS) is required to issue refunds to organizations for taxes they paid over the past two years.
The amount associations paid varied widely, with large associations typically having paid more than smaller ones. Early estimates said, on average, the tax would cost organizations about $12,000 annually, but no data is currently available on how much associations actually paid. Regardless the amount to be refunded, associations will receive some unexpected money.
Now that the IRS has issued guidance on how organizations can claim refunds, it’s a good time to think about what to do with that money. I spoke about some options with Rob Olcott, CIMA, FASAE, CAE, regional director at investment and consulting firm DiMeo Schneider and Associates.
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