Exempt Organizations: The New Excise Tax on Excess Compensation

excise tax, healthcare, tax billOn December 22, 2016, the Tax Cuts and Jobs Act (the “Act”) became law. While cutting certain tax rates, the Act also imposed a new tax: There is now an excise tax applicable to exempt organizations on “excess compensation.” This new tax will apply to the following: “(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 of $1,000,000, plus (2) any excess parachute payment paid by such an organization to any covered employee.” Pub. L. No. 115-97, § 13602 (to be codified at I.R.C.… Read More