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New York Governor Andrew Cuomo approved a bill that protects non-profit organizations from a tax increase due to a change under the Tax Cuts and Jobs Act. Under the federal tax law, the amount paid or incurred by any non-profit employers for commuter benefits such as transit or parking is a taxable income. The legislation signed by Cuomo will separate the State New York of New York’s tax code from the Tax Cuts and Jobs Act. It ensures non-profit employers can continue to deduct expenses for commuter benefits when computing the state Unrelated Business Income Tax. A provision of the federal tax law imposes an additional nine percent tax on non-profit organizations. It will also divert millions of dollars annually from the non-profit sector. Without the legislation approved by the governor, New York will automatically comply with the Tax Cuts and Jobs Act.

Cuomo says “New York stands with the non-profit community”

In a statement, Cuomo once again condemned the federal tax law. He said, “The federal tax bill egregiously raises costs on non-profits operating in New York State.” Additionally, the governor said, "By decoupling from this area of the federal tax code, we are taking action to protect these critical organizations from the federal assault and sending a strong message that New York stands with the non-profit community." Cuomo previously called the Tax Cuts Jobs Act as a “double “taxation” and an “arrow pointed to the heart of New York” due to its provision limiting the state and local tax (SALT) deductions. On the other hand, Lieutenant Governor Kathy Hochul, commented, "The federal tax bill is an attack on hardworking New Yorkers. This legislation will help to protect non-profits from experiencing a tax increase as a result of the Trump tax plan.” “We want to ensure that nonprofits are not forced to decide between paying more in taxes and cutting employee benefits. Non-profits play a critical role in providing services to New Yorkers, and this tax hit orchestrated by Washington will undermine their ability to perform those functions,” she added.