WASHINGTON—The Internal Revenue Service said it plans to address implementation of the new tax law's employer-paid 21% excise tax on executive compensation of more than $1 million.
The IRS made the statement in response to a letter from NAFCU President and CEO Dan Berger. Berger had brought credit unions' concerns over the tax to the agency in January.
The IRS' response, sent by Executive Compensation Branch Chief Catherine Fernandez, thanked Berger for identifying those concerns and noted the implementation of the executive compensation excise tax has been included in the agency's updated priority guidance plan.
Berger's January letter included requests for the IRS to:
- Evaluate its authority to "grandfather" those employment contracts entered into on or before Nov. 2, 2017
- Support a bill providing technical corrections, especially one regarding grandfathering and other issues affecting credit unions
- Provide clarifications to credit unions on how they should comply with the new excise tax on certain nonqualified deferred compensation plans.
NAFCU said it will continue to monitor the IRS' guidance on nonqualified deferred compensation plans to ensure parity between for-profit and not-for-profit corporations.