Claiming Your Refund for Taxes Paid for Qualified Transportation Fringe Benefits

With the recent repeal of Section 512(a)(7), taxes paid by exempt organizations on qualified transportation fringe benefits (QTFBs) for amounts paid or accrued after December 31, 2017 are now eligible for refund. The repeal of the tax was great news to exempt organizations, but there was uncertainty about the specific procedure for claiming a refund for taxes paid in prior years. 

On January 21st, the IRS issued guidance for claiming a refund for taxes paid in prior years. Organizations wishing to claim a refund must file an amended Form 990-T for each year a refund is claimed. Initially some commentators had hoped for a more streamlined process for requesting refunds without the filing of amended returns. However, amended returns will bring clarity to net operating loss carryforwards and carrybacks, and the separate reporting of unrelated businesses.

It is important to note that the existing statute of limitations for filing amended returns still affects these returns. Amended returns must generally be filed within 3 years of the original filing date.

If you have any questions about your organization’s tax liability or the refund process, please feel free to contact us.