April 19, 2018 - As NPCC told you in our March e-newsletter, as a result of the new federal tax law, nonprofit employers must now pay Unrelated Business Tax Income (UBIT) on some fringe benefits, including on Metrocards and other “qualified transportation fringe benefits” (also known as commuter benefits). This will increase a nonprofit organization’s expenses. For example, an employer with 40 employees, where each employee enjoys $150 per month in pre-tax commuter benefits, that employer could be taxed $21,600 ($150x12x40x30%), of which $15,1202 would go to the federal government and $6,480 would go to New York State.
NPCC and the Lawyers Alliance for New York, as a part of a larger coalition, are advocating with New York State tax to reform our state tax law to reduce the cost to nonprofits.