TCJA Excise Taxes Hit Their Stride: $244 Million from University Investment Income & $671 Million from Excess Exec Comp (for 2022)

Last month the IRS released the 2022 excise tax collections from charities, private foundations, and split-interest trusts. The tax on net investment income of private colleges and universities (section 4968) hit 58 institutions (up from 33 in 2021) and collected $248 million (up from $68 million in COVID pandemic year 2021). This matches the $0.2 billion per year revenue estimate from the Joint Committee on Taxation in December 2017.

And the tax on excess executive compensation (section 4960) saw an even more dramatic jump. In 2021 only 516 organizations paid the tax, for a total of $210 million. But in 2022, those figures jumped to 1,710 organizations paying almost $671 million.  That greatly exceeded the JCT’s revenue estimate, which had been for $0.2 billion per year.

Lloyd Mayer