New tax targets employee parking offered by congregations, nonprofits
Even when a congregation is below the threshold the IRS has established, determining that requires a fair amount of computation.
Like houses of worship across the country, Calvary Church in Santa Ana, California, typically hasn’t had to worry about filing a federal tax form. But an obscure provision in the corporate tax overhaul approved by the Republican-controlled Congress at the end of 2017 may change that.
That provision imposes a 21 percent tax on employee parking benefits provided by thousands of congregations and nonprofits. To pay that tax, some churches may have to file Form 990-T with the IRS if they provide parking for employees.
“We do realize that we don’t pay income taxes, and we have exemptions for property taxes, so our goal is to invest those dollars we would have paid in taxes into our community in volunteer hours or direct contributions,” said Michael Welles, executive pastor of Calvary, which has 2,200 weekend attendees and a $5.5 million annual budget. “We will continue to do that whether or not we have to pay parking taxes, but we will just have less available from which to bless others.”
