By Ray Birch
BIRMINGHAM, Ala.—The IRS has now issued interim guidance on how tax-exempt organizations will comply with the new excise tax that was part of the Tax Cuts and Jobs Act—and Dennis Dollar says federal CUs have dodged a bullet with the new 92-page document.
However, the former NCUA chairman also sees some bad news in the guidance, including no clause grandfathering existing compensation plans or deferred benefits already in place, and he fears the new rule could slow FCU growth by having a chilling effect on hiring and retaining quality executive talent.
As CUToday.info has reported, the new law imposes a 21% excise tax on executive compensation, including salary and benefits, that exceeds $1 million annually. The tax would be paid by the credit union.