Coaches Tax Creates Salary Headaches for Nonprofits, CPAs Say

Those millionaire coaches may have drummed up success in college football and basketball, but paying them has created headaches for those who write the checks.

A group representing certified public accountants is expressing concern that nonprofits aren’t receiving clear instructions on how to calculate compensation tied to a portion of the 2017 tax law designed to target highly-paid employees of tax-exempt organizations.

Tax Cuts and Jobs Act Section 4960—known as the coaches tax—imposes a 21% excise tax on a nonprofit’s five highest-paid employees making more than $1 million. There’s concern over how a university, hospital, museum, or charity ...