WASHINGTON—House Ways and Means Oversight Subcommittee Chairman John Lewis (D-GA) has scheduled a hearing for June 19 to discuss repealing the 21% excise tax imposed on certain not-for-profits’ fringe benefits programs, including a tax that some credit unions had to start paying this year on executive compensation plans.
The excise tax, implemented under the Tax Cuts and Jobs Act (TCJA), also affects items such as transportation and parking.
The hearing is set to begin at 2:30 p.m. ET on the 19th.
Both trade groups opposed the implementation of the new excise tax on CU compensation plans, and NAFCU said it will continue to seek relief for credit unions from the new tax imposed on certain not-for-profits.
The excise tax for credit union executives applies to all compensation that exceeding $1 million annually, including deferred compensation and severance packages.
Working With IRS
As a result of the new tax requirements, NAFCU said it also worked with the IRS to obtain more reporting guidance for credit unions. In December, the IRS issued interim guidance on how to report the tax; a NAFCU Final Regulation provides additional context. The IRS also recently clarified that that Form 4720 – the form federal credit unions must submit related to the excise tax on excess executive compensation – is not subject to public disclosure unless filed by a private foundation. NAFCU's Compliance Blog further explains the filing implications.