Home / Articles / Year-end spending bill has implications for nonprofits

Year-end spending bill has implications for nonprofits

December 30, 2019

Share:

Just before leaving for their holiday break, Congress passed a few pieces of tax legislation. The year-end spending bill, signed into law on December 20, 2019, included two items of importance to the nonprofit community.

The first item is the retroactive repeal of the parking tax. The December 2017 Tax Cuts and Jobs Act instituted a tax for nonprofits on the fringe benefit of on-premise parking for employees. Many nonprofits have already begun to pay this tax. With its recent bill, Congress repealed this tax retroactively. As a result, nonprofits immediately can cease paying parking tax estimates. The IRS will refund any taxes already paid for 2018 calendar year-ends and fiscal years ending in 2018. We are awaiting guidance from the IRS on how to process refund claims.

The second item of note from Congress’ recent legislation impacts private foundations. Private foundations normally pay a 1-2% tax on net investment income. Determination of the rate is based on whether current-year charitable giving exceeds the average giving for the prior five years. Private foundations giving in excess of the prior five-year average were allowed to use the 1% tax rate, while all others paid a 2% tax. For tax years beginning after December 20, 2019, private foundations will pay a 1.39% tax on net investment income.

If you need assistance preparing an action plan for either of these two legislative updates, please reach out to your CSH advisor or contact us.

All content provided in this article is for informational purposes only. Matters discussed in this article are subject to change. For up-to-date information on this subject please contact a Clark Schaefer Hackett professional. Clark Schaefer Hackett will not be held responsible for any claim, loss, damage or inconvenience caused as a result of any information within these pages or any information accessed through this site.

Guidance

Related Articles

Article

2 Min Read

Supply chain software can help digitize the dilemma

Article

2 Min Read

Oversight and controls are key to limiting fraud in nonprofits

Article

2 Min Read

Standard business mileage rate will increase for the second half of 2022

Article

2 Min Read

Proposed regulations for inherited IRAs bring unwelcome surprises

Article

2 Min Read

Get your piece of the depreciation pie now with a cost segregation study

Article

2 Min Read

Navigating the New Data Privacy Landscape

Get in Touch.

What service are you looking for? We'll match you with an experienced advisor, who will help you find an effective and sustainable solution.
  • Hidden
  • This field is for validation purposes and should be left unchanged.