For the past several months, America’s nonprofit sector, including Agudath Israel of America, has been highlighting an issue that surprisingly came to light as a result of last year’s landmark tax reform bill. And it is an issue that will have a detrimental effect on the work and finances of certain nonprofit organizations, including affected synagogues, schools and charities within our community.
Under the new law, for the first time, nonprofit organizations that provide to their employees transportation and other commuter benefits – e.g., parking and transit passes – whether they are made available in localities, like New York, where they are mandated or in other localities where they are optional, will be slapped with a 21% tax. This could result in an added liability of thousands, if not tens of thousands of dollars, for our already-financially-strapped religious institutions. Moreover, this steep burden on the synagogues, schools, and charities that offer these benefits will only be made worse by the new costs of preparing and filing tax returns – including a Form 990, never before required of religious entities — and meeting other compliance requirements.
Simply put, the new tax will divert sparse funds and create additional strain on certain synagogues, schools and charities. It will be even harder for them to make ends meet and ultimately result in the cutting back on benefits to dedicated staff (in cities where the benefits are not mandated) and on the quantity and quality of their community and educational services. The pressure will be passed along to Individuals and families who will be looked to to cover these new costs.
But the good news is that several bills have been introduced in Congress to repeal the new law and its onerous burdens. One bill to rally around is the LIFT for Charities Act (S.3332/H.R.6460), introduced by Senator James Lankford (R-OK) and Representative Mark Walker (R-N.C.), respectively. Please take action (below) by calling or writing your senators and representatives and urging them to support and co-sponsor these important bills.