Sec. 304. Excise tax on excess compensation of covered employees of partitioned multiemployer plans
384 words·~2 min read·
/bill/116/s/5045/is/section-304A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
Chapter 43 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section: In the case of an applicable multiemployer plan, there is hereby imposed an excise tax for each plan year in an amount equal to the product of— the rate of tax under section 11 for taxable years beginning in the calendar year in which such plan year begins, and so much of the remuneration paid by the applicable multiemployer plan for the plan year with respect to employment of any covered employee as exceeds $500,000.
For purposes of the preceding sentence, remuneration shall be treated as paid when there is no substantial risk of forfeiture (within the meaning of section 457(f)(3)(B)) of the rights to such remuneration. The applicable multiemployer plan shall be liable for the tax imposed under subsection (a). For purposes of this section— The term applicable multiemployer plan means any multiemployer plan which is an original plan (as defined in section 4233A(d)(3) of the Employee Retirement Income Security Act of 1974) with respect to a multiemployer plan which was partitioned pursuant to an order by the Pension Benefit Guaranty Corporation under section 4233A of such Act.
The term covered employee means any employee (including any former employee) of an applicable multiemployer plan if the employee— is one of the 5 highest compensated employees of the plan for the plan year, or was a covered employee of the organization (or any predecessor) for any preceding plan year beginning after the date of the enactment of this section. The term remuneration means wages (as defined in section 3401(a)). The Secretary shall prescribe such regulations as may be necessary to prevent avoidance of the tax under this section, including regulations to prevent avoidance of such tax through the performance of services other than as an employee or by providing compensation through a pass-through or other entity (including a related entity) to avoid such tax. .
The table of sections for chapter 43 of the Internal Revenue Code of 1986 is amended by adding at the end the following new item: Sec. 4980I. Tax on excess compensation of covered employees of partitioned multiemployer plans. . The amendments made by this section shall apply to plan years beginning after the date of enactment of this Act.