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Much has been written about how the 2017 Tax Cuts and Jobs Act changed the tax rate for C corporations and created a deduction for S corporations. But all this attention to corporations meant that other impactful provisions went into effect without much notice. One provision that slipped by almost unnoticed is the excise tax under IRC §4960: “Tax on excess tax-exempt organization executive compensation.” Despite not getting much fanfare when initially enacted, this excise tax is something that all tax-exempt entities need to understand so that they’re not caught unaware.
The job market is starting to tighten, and would-be employees are looking for extra benefits that make the organizations they apply to stand out from the crowd. One such benefit is student loan assistance. On Aug. 17, 2018, the IRS issued private letter ruling 201833012 (the “PLR”). The PLR addressed an individual plan sponsor’s desire to amend their 401(k) plan to include a program for employees that were making student loan repayments. The form of this benefit would be an employer nonelective contribution (“SLR Contribution”).
Ed O’Malley, Executive Vice President, Head of Insurance Brokerage and Consulting
The Tax Cuts and Jobs Act of 2017 (TCJA) has shifted – and in many cases eased – the tax burden on companies across the country. Organizations everywhere are finding themselves with an exciting influx of new money thanks to the new tax reductions — and smart organizations may decide this is an opportune time to reinvest in their talent. Learn how to use the changes of the TCJA to stay competitive by recruiting the best available talent, retaining that talent by giving them all the reasons to stay, and providing that talent a rewarding path to retirement.