The IRS announced April 9 that, due to the COVID-19 pandemic, tax returns and payments for tax-exempt organizations and fiscal year businesses due between April and June are now delayed until July 15, 2020.
The extension announced by Treasury Secretary Steven Mnuchin includes excise taxes that associations and other tax-exempt organizations pay on certain executive compensation. ASAE had asked Treasury and the IRS for this relief while associations continue to experience extreme revenue losses during the coronavirus pandemic.
“ASAE applauds the IRS for taking this step to alleviate some of the pressing tax demands on many associations during these unprecedented times,” said ASAE President and CEO Susan Robertson, CAE. “Associations’ revenue streams have been severely interrupted by forced event cancellations and loss of member engagement due to the ongoing COVID-19 pandemic. The fiscal challenges many associations are experiencing are far worse than in any other recent period in history. As our community makes daily, difficult decisions in order to continue to serve their members, the delay in tax filings and payments is one less immediate concern on their plate.”
The 21 percent excise tax on tax-exempt executive compensation exceeding $1 million in any taxable year was enacted as part of the 2017 Tax Cuts and Jobs Act. ASAE has repeatedly voiced concern about the tax because compensation subject to the tax includes more than just base salary. It includes the cash value of most benefits, including those that have vested but have not been received, retirement benefits, and certain retention payments contingent upon service. This means that many nonprofit groups could be impacted, not just those with highly compensated CEOs.