State UBIT and Commuter Benefit - Legislative Fix in the Governor's Budget

Wednesday, February 6, 2019

State UBIT and Commuter Benefit - Legislative Fix in the Governor's Budget

In December 2018, Governor Cuomo signed the law that decouples the state and federal tax law so that New York State will NOT tax nonprofits on commuter benefits. This means the state tax burden of 9% on all qualified transportation benefits has been eliminated! However, a drafting error created problems for those organizations with a fiscal year start date that does not align with the calendar year. We have worked closely with the state to fix this error, and the fix was included in the Governor's budget this month. (For those of you who would like to see the language, it is in Section 9 of Part Z of the Revenue bill.) Assuming this section stays in the final budget bill, it will fix the law to reflect the original intent: that the state tax law should be decoupled entirely from the federal tax law...

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