WASHINGTON–CUNA said it has concerns with several taxes contained in the just-introduced Tax Cuts and Jobs Act now in Congress.
As CUToday.info reported here, the nearly 300-page tax bill would affect Americans' retirement savings, numerous business tax breaks and even redesign the Internal Revenue Service–but it does not include any changes to a new tax on compensation for some credit union executives.
The legislation was introduced by House Ways and Means Committee Chairman Rep. Kevin Brady (R-TX).
In a letter sent to Brady, along with Sen. Orrin Hatch (R-UT), Sen. Ron Wyden (D-OR), and Rep. Richard Neal (D-MA), CUNA said, “America’s credit unions were deeply appreciative that the Tax Cuts and Jobs Act of 2017 (TCJA) retained the credit union exemption from the federal income tax. This reflects Congress’s understanding that the tax status is based on credit unions’ unique structure and mission within the financial services sector.
“While credit unions are exempt from income tax, they are subject to various other taxes and are therefore invested stakeholders in tax legislation under consideration by Congress,” the letter continues. “Through this lens, we raise additional concerns we hope Congress will address in H.R. 88, the Retirement, Savings, and Other Tax Relief Act.”
The letter notes H.R. 88 contains two CUNA-supported extensions of tax provisions that have expired, known as “tax extenders.” One eliminates the requirement for most financial institutions to file an IRS Form 1099-C on a mortgage default involving an individual's primary residence.
The second provision would make insurance premiums paid in 2017 retroactively deductible as homeowners filed their 2017 tax returns. Both provisions expired at the end of 2017, said CUNA.
Changes Sought
The trade group is calling on Congress to make several changes to H.R. 88, including:
- Provide parity by grandfathering not-for-profit employer contracts in effect on or before Nov. 2, 2017. The TCJA imposes an excise tax on certain executive compensation provided by tax-exempt organizations, including credit unions.
- Delay the effective date of a TCJA provision on a provision that extends Unrelated Business Income Tax (UBIT) for tax-exempt organizations on certain employee fringe benefits, such as transportation, parking and on-site gym and athletic facilities.