IRS Provides Guidance on Church Parking Tax

A provision in the Tax Cuts and Jobs Act requires tax-exempt organizations to report and pay taxes on amounts spent to provide parking and other qualified transportation fringe benefits to employees beginning in 2018. The IRS issued interim guidance for impacted entities to assist them in determining how much of their total parking expenses are attributable to employee parking law on December 10, 2018.

Parking expenses may increase the unrelated business income tax (“UBIT”) of tax-exempt organizations. The guidance provides a four-step safe harbor approach of making this determination and explains a waiver of penalties that will be available to certain tax-exempt organizations that have not made required estimated tax payments due to the parking tax.

Click here to read a summary of the guidance.

Links to the interim guidance notices are available here and here.

Because the interim guidance is complex, only temporary, and provides only limited relief, the Church Alliance—the coalition of 37 denominational benefit organizations, of which Wespath is a standing member—continues to support full repeal of the parking tax.

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