Skip to content
Subscriber Only

IRS Softens Blow After Tax Law Cut Nonprofit Employee Perks

  • Guidance on parking benefits follows backlash from churches
  • Some Republican leaders have reversed position on law change
An American flag flies outside the Internal Revenue Service (IRS) headquarters at sunrise in Washington, D.C., U.S.
Photographer: Andrew Harrer/Bloomberg
Updated on

The Internal Revenue Service moved to soften the hit from a controversial provision in last year’s tax overhaul that imposes a tax on some coveted benefits for employees at nonprofits.

The law sets a 21 percent tax rate for nonprofits on so-called fringe benefits -- such as free parking and fare for mass transit -- they provide to employees. Previously, nonprofits didn’t have to pay tax on the perks. Religious groups have pressured top Republican leaders, including House Ways and Means Chairman Kevin Brady, to repeal the tax this year.