Wednesday, December 27, 2017
Chronicle of Higher Education, New Tax Law Takes Aim at Higher Education’s Millionaires Club:
[The new tax law imposes] a 21-percent tax on annual compensation in excess of $1 million paid to the five highest-paid employees of a nonprofit group — including college presidents, chancellors, and coaches. For medical professionals, however, compensation that is directly related to medical or veterinary services would not be taken into account. ...
According to an analysis by The Chronicle, America’s private, nonprofit colleges had 158 million-dollar employees in the 2015 calendar year, excluding medical staff members. The highest earners primarily included chief executives, athletics staff members, and investment officers. Mike Krzyzewski, head coach of the men’s basketball team at Duke University, topped the list, earning $7.4 million in 2015.
The Chronicle’s analysis is based on the latest available Form 990s of the 500 private, nonprofit colleges with the largest endowments. Reportable taxable compensation is the sum of base salaries, bonuses, and other compensation paid to employees by the institution and its related organizations. It remains to be seen whether the IRS will use the same Form 990s to levy this new tax.