Repeal of increase in unrelated business taxable income for certain fringe benefit expenses under Section 302 of the Act
This provision repeals the increase to Unrelated Business Income (UBI) of an exempt organization for expenses related to qualified transportation fringe benefits paid or incurred by the exempt organization. This repeal is retroactive to amounts paid or incurred on or after January 1, 2018. The now-repealed provision was originally enacted in the Tax Cuts and Jobs Act of 2017 (Public Law 115-97, section 13703). Iowa was not conformed with this addition to UBI for Tax Year 2018. Iowa is not conformed with this repeal for Tax Year 2019, meaning this addition to UBI will apply to exempt organizations for Iowa tax purposes in tax year 2019, even though it does not apply for federal tax purposes.
-
Iowa treatment for Tax Year 2018: Exempt organizations that already filed a 2018 IA 1120 and subtracted this income from their UBI on the 2018 Nonconformity Adjustments Worksheet need not file an amended Iowa return because of this federal change. If an exempt organization files an original 2018 IA 1120 to report UBI, no Iowa adjustment to the federal UBI amount should be necessary.
-
Iowa treatment for Tax Year 2019: Exempt organizations may be required to file an IA 1120 to include this income addition in its Iowa UBI even though no such addition is required for federal purposes.