Research Report How the TCJA's New UBIT Provisions Will Affect Nonprofits
A Tax on Transportation Fringe Benefits and Separate Reporting of Unrelated Business Income Streams
Elizabeth T. Boris, Joseph J. Cordes
Display Date
Download Report
(472.18 KB)

Changes in Unrelated Business Income Taxes (UBIT) mandated by the Tax Cuts and Jobs Act (TCJA) of 2017 will have significant costs for some nonprofit organizations. A survey of Independent Sector members and partner organizations in November 2018 reveals the costs and other implications of those changes.

Costs of New Transportation Benefits UBIT Taxes: Over 200 nonprofit organizations estimate it will cost them more than $2.1 million dollars in unrelated business income taxes (UBIT) on transportation fringe benefits they provide to employees, and for organizations that will report UBIT for the first time under that requirement, there will be estimated associated administrative expenses for filing IRS tax forms (Form 990T) of more than $200,000.

Costs of New Reporting Rules for UBIT: Required separate reporting of multiple revenue streams for purposes of UBIT is estimated to cost an additional $376,150 for affected organizations.

Research Areas Nonprofits and philanthropy