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Tax-Exempt Organizations Face A New Excise Tax

Law360 (February 7, 2018, 1:06 PM EST) -- On Dec. 22, 2016, the Tax Cuts and Jobs Act, P.L. 115-97, became law. For exempt organizations, the TCJA included a key change: There is now an excise tax applicable to exempt organizations on “excess” executive compensation. This new tax, which is imposed under section 4960 of the Internal Revenue Code, will apply to:

  “(1) so much of the remuneration paid (other than any excess parachute payment) by an applicable tax-exempt organization for the taxable year with respect to employment of any covered employee in excess...
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