IRS Changes for Nonprofits and Employers

IRS Changes for Nonprofits and Employers

Since the Tax Cuts and Jobs Act (TCJA) in late 2017 and the Taxpayer First Act of July 2019, there are significant changes in tax regulations.  The IRS issued and revised several regulations that affect nonprofits and religious organizations specifically. Here are a few you need to be aware of:

Tax-Exempt Organizations must file Form 990 electronically for tax years beginning after July 1, 2019.

If your tax year ends on or before June 30, 2020, you can still file via paper this year.
Form 990-EZ short-form filers (revenues less than $200,000 and assets less than $500,000) have an additional year before they are required to file electronically (tax year beginning July 1, 2020).
The 990-N for organizations with less than $50,000 file their e-Postcard as always.
If you have UBIT (unrelated business income tax), you may still use paper forms for 2020 filings, but the IRS plans to have e-filing for these in 2021.

 

Apply for Tax-Exempt Status Electronically with the Revised Form 1023.

The IRS found a significant reduction of errors in the submissions when they converted the Form 1023-EZ to electronic format back in 2014. Here is a link to the online application https://pay.gov/public/form/start/704509645.

The “Parking Lot Tax” for Exempt Employers has been Repealed.

The TCJA required a 21% tax on some employee benefits including parking. This caused many churches to pay an UBIT (unrelated business income tax) on the cost of parking provided to employees. This NO Longer applies, and organizations can claim a refund. Click here for details on how to claim the refund. https://www.irs.gov/forms-pubs/how-to-claim-a-refund-or-credit-of-unrelated-business-income-tax-ubit-or-adjust-form-990-t-for-qualified-transportation-fringe-amounts

Have Your Employees Fill Out a New Form W-4 Payroll Withholding.

The IRS has a Withholding Calculator to use to make certain employees do not have too much, or too little taxes withheld. The calculator will help determine if a new W-4 should be completed. Remind them to also double-check their state tax calculations where applicable.

 

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