Kent Mason Comments on Tax Bill Glitch and Subsequent Fix with Pensions & Investments
- Published Date: May 15, 2025
- Written By: Davis & Harman
Davis & Harman Partner, Kent Mason, was featured in a Pensions & Investments article titled, “Tax bill could knock retirement plans, American Benefits Council says as it urges fix.”
The article details a glitch found within the text of the House-introduced budget reconciliation package that would have subjected companies that offer a retirement plan to a 21% excise tax on all wages paid to any employee over $1 million. The bill applied a 21% excise tax on a tax-exempt organization “or any related person or governmental entity” with respect to all employees earning wages over $1 million.
The legislation was not intended to impose the tax on a company by reason of the company sponsoring a retirement plan (or a VEBA or a charity); however, the draft language would have inadvertently included such companies that as a “related person,” subjecting the company to the excise tax. (This glitch was corrected prior to House package.)
Mason is quoted that:
“[House Ways and Means] Chairman [Jason] Smith’s office has been extremely responsive in setting up time to discuss this issue further on an expedited basis, for which the American Benefits Council is very appreciative . . . [w]e do not speak for Chairman Smith’s office, of course, but we are optimistic that this issue will get more attention quickly, though we cannot say how it will be resolved.”
A link to the full article can be found here.
