Non -profit increase in unrelated business income tax:

Although non -profit organizations have been operating for a long time under special tax protections, the recent A great act of bill Indicates a significant tightening of the rules concerning the taxable income of unrelated companies (UBTI).

If it is adopted, the bill could have large -scale effects on your organization, which affected it by policy changes, financing reductions and other tax implications that could considerably affect your financial strategies and the way you provide services to your community.

UBTI can be increased on certain social benefits

Non -profit organizations are often based on certain transport of transport fringes to attract and retain employees, such as transport subsidies and parking allowances. The proposed bill would transform the provision of the above benefits into UBTI for tax-exempt organizations. Religious organizations would be exempt from this provision.

This additional tax burden could force non -profit organizations to reassess their employee services packages, which could reduce labor attractiveness in the non -profit sector or support the additional tax burden. In addition, the administrative burden on monitoring and declaring these benefits within the framework of the UBTI could increase operational costs and require stricter financial monitoring.

What you can do now

Non -profit organizations should carry out an in -depth assessment of their current fringe services by examining and identifying those which can be subject to unrelated business income tax. They should also consider reassessing the benefits and ensuring that they are communicated and educated their employees about change.

Exclusion of search income limited to research accessible to the public

This change means that any research income which is not freely accessible to the public will now be treated as Ubti. Non -profit organizations engaged in research activities must carefully assess to what extent their research is accessible to the public. If research is at the origin of payment walls, limited to certain groups, or not accessible to the public, the income drawn from it will be subject to the UBTI rules. It is important to note that non -profit organizations, where research activities are accessory to their main exempt mission, will no longer be eligible for the exclusion of UBTI research.

This change may have an impact on financial planning and tax responsibilities of research organizations focused on research. These organizations may face an increase in taxable income, leading to higher tax charges and requiring adjustments to their financial strategies.

What you can do now

Non -profit organizations may need to implement a more sophisticated follow -up process to distinguish between research income accessible to the public and non -public research income and to take into account related expenses with precision.

Other potential tax changes to monitor

• Tax on surplus remuneration: Widens the tax on excess remuneration in Tax -exempt organizations By defining “a covered employee” as anyone who earns more than a million dollars. The considerations and exemptions of the parties linked to the medical services remain unchanged.
• Modification of net investment income: The tax rate of the excisements for net investment income from private foundations will be on several levels depending on the total assets. Foundations with less than $ 50 million assets will retain a rate of 1.39%, while a new rate higher by 10% is offered.
• Tax credit for contributions from individuals to scholarship organizations: To qualify, the organization must be designated as an “granting organization”. This designation allows the organization to provide scholarships to primary or secondary students, subject to specific criteria.