March 01, 2019

Interim Guidance on Section 4960 Excise Tax Allocations: Considerations for Tax-Exempt Healthcare Organizations

Christine L. Noller, JD, LLM, Saginaw Valley State University, University Center, MI

Introduction and Background

The Tax Cuts and Jobs Act of 2017 (TCJA) adds Section 4960 to the Internal Revenue Code (IRC). Section 4960 imposes an excise tax1 for remuneration2 paid by an applicable tax-exempt organization (ATEO)3 to any covered employee4 in excess of $1 million plus any excess parachute payment5 paid by such organization to any covered employee. 

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