For-Profits Could Owe Portion Of Nonprofit Executive Pay Tax


Ralph Dejong commented on the Internal Revenue Service’s recent guidance regarding how nonprofits calculate excise taxes on excess pay for executives. “It could be challenging to apply the substantial risk of forfeiture concept to the equity arrangements that will be swept into the ambit of the new tax,” DeJong said. “A further challenge will be to assess how and when various forms of potential future remuneration might become or be treated as ‘vested,’ because vesting is the concept that will drive the timing of when amounts are treated as remuneration potentially subject to the excise tax.”