Despite advocacy by the NAE and many others, Congress has not repealed a 21 percent tax on parking and other transportation benefits that nonprofit organizations, including churches, provide to their employees. Action by churches to remove reserved parking spaces by March 31 may reduce or eliminate the tax and filing requirements for many churches and some nonprofits.

The tax was imposed by Congress as part of the Tax Cuts and Jobs Act of 2017, and went into effect on January 1, 2018. The tax is based on the cost of the benefits provided. Churches and organizations that provide transportation benefits that, together with any unrelated business income, total $1,000 or more owe the tax. Groups that owe the tax are required to make quarterly estimated tax payments, and to file IRS form 990-T each year. For most organizations the first 990-T filing deadline is May 15, 2019. Unlike most other tax returns, the completed 990 forms are made available by the IRS to the public.

In December 2018, the Treasury Department issued interim guidance that, for 2018, allows churches and nonprofits to use any reasonable method to calculate the tax owed. It offers penalty relief for most organizations that missed the deadlines for the quarterly estimated payments.

The Treasury Department guidance also contains a provision that may eliminate the tax and filing requirements for many churches and some nonprofits if they reduce or eliminate reserved parking spaces for pastors and other employees. Any action taken by March 31, 2019 to remove reserved parking spaces will be deemed for tax purposes to have been taken on January 1, 2018, when the tax went into effect.

The NAE encourages its members to comply with the law and to consider steps that they can take now to reduce or eliminate their tax liability. Members are also encouraged to contact their members of Congress to ask them to repeal this tax on churches and nonprofit organizations.