Credit union trade groups are calling on lawmakers to make a variety of changes to the 2017 tax reform that would benefit the industry.
This includes a push for changes to excise taxes on executive compensation provided by tax-exempt organizations such as credit unions. The 2017 tax reform imposed an excise tax on some compensation for these organizations.
The Credit Union National Association asked legislators to “provide parity by grandfathering not-for-profit employer contracts in effect on or before Nov. 2, 2017,” in a letter sent Monday to members of the House Ways and Means Committee and Senate Finance Committee following the release of the Retirement, Savings and Other Tax Relief Act of 2018.
The National Association of Federally-Insured Credit Unions has also raised that issue.
“We do not believe it was the intent of [the Tax Cuts and Job Relief act of 2017] to disadvantage the not-for-profit sector vis-à-vis the for-profit sector in such a way, and would urge a fix to the TCJA to provide not-for-profits a similar grandfather clause to what is enjoyed by for-profits,” said Brad Thaler, vice president of legislative affairs at NAFCU.
The House bill also includes extensions to expired tax provisions, eliminating the requirement for most financial institutions to file a 1099-C form with the IRS on mortgage defaults and making 2017 insurance premiums retroactively deductible for homeowners.
Both CUNA and NAFCU have indicated an interest in seeing those provisions extended.
Additionally, CUNA requested a delay in the effective date for extending Unrelated Business Income Tax for tax-exempt groups on employee fringe benefits such as transportation, parking and on-site athletic facilities.
