§4960 Excise Tax
The Expanded Section 4960 Excise Tax Reaches Up to 28% More Nonprofit Employees — and Almost No New Organizations
The 2025 tax law expanded which nonprofit employees can trigger the 21% excise tax on compensation over $1 million — from each organization's five highest-paid employees to any employee. A CauseComp analysis of the most recent IRS Form 990 Schedule J filings from more than 67,000 organizations finds the expansion reaches an estimated 734 to 1,302 additional employees earning over $1 million — a 25–28% increase — while adding essentially zero newly exposed organizations. The impact lands almost entirely on hospitals, universities, and organizations with budgets above $100 million.
CauseComp·
2026-07-24