Details on UBIT Refunds & Excise Tax Simplification

Thursday, January 30, 2020

MCF and the entire independent sector contributed to two exciting wins for the sector in December 2019 -- a simplifcation of the private foundation excise tax to 1.39%, and the retroactive repeal of the 21% Unrelated Business Income Tax (UBIT) on nonprofit employee transportation fringe benefits. Read more about the two policy wins and how MCF contributed here. More details have come out as organizations look to implement these changes and think about how it may impact their tax filings. MCF will continue to monitor these changes; please don't hesitate to be in touch with questions!

UBIT Refunds 

The IRS recently issued instructions on how nonprofits can file for UBIT refunds. If your organization is looking to file for a refund, here is the IRS guidance.

New Private Foundation Excise Tax Rate

The change will be effective for tax years after the bill’s enactment. This means that the new, flat excise tax rate of 1.39% will be effective in 2020.  Private foundations will still use the two-tiered system for 2019 tax filings. 

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