Update: On December 20, 2019, the “parking lot tax” was officially repealed. Churches wanting to claim a refund for unrelated business income tax (UBIT) due to the repeal must file an amended Form 990-T for the applicable year or years. Go to the IRS website for specific guidance.
Editor’s note: In December 2018, the IRS issued interim guidance on this topic until a final ruling is clarified. We published that story here: “IRS Issues Interim Guidance, Special Rule Regarding 'Parking Lot Tax'.”
A new definition of unrelated business income created through the Tax Cuts and Jobs Act of 2017 has the nonprofit community, including the church community, buzzing with a mixture of rumors and facts regarding potential new tax liabilities and filing responsibilities. While there are differing opinions on the matter, we believe many churches are not affected by this provision when it comes to the parking they provide to employees. Let’s take a closer look at why we reached this conclusion.