Edenred Commuter Benefit Solutions, which mission is to make tax-free commuter benefits an essential part of employee benefits packages nationwide, praises the repeal of a section of the 2017 Tax Cuts and Jobs Act that required tax-exempt organizations to pay a 21% Unintended Business Income Tax (UBIT) on parking and transit benefits provided to employees, which comes as part of the year-end spending and tax package signed on December 20, 2019.
Thousands of tax-exempt organizations, including charitable groups, museums, houses of worship, universities, and hospitals were heavily impacted by the tax increase, in some cases having to pay up to millions of dollars to remain in compliance.
Edenilson Fleischmann, Edenred Commuter Benefit Solutions CEO, declared :
“As a consequence of the tax on transit and parking benefits, many organizations had decided to eliminate their commuter benefits program or avoided implementing one despite its benefits. We are now confident that the repeal of the tax will enable organizations to implement commuter benefit programs for their employees.
This change is very encouraging for Edenred Commuter Benefit Solutions as our goal has always been and continues to be the expansion of the value that commuter benefit programs bring to employers and employees nationwide. We look forward to working with nonprofits to implement or reintegrate their commuter benefit programs in light of this new legislation.”
The new legislation is retroactive for taxes that tax-exempt organizations have paid or accumulated since December 31, 2017.
We look forward to working with nonprofits and other tax exempt organizations to implement or reintegrate their commuter benefit programs.