§ 47:64 — Deductions from gross income; pension trusts

An employer establishing or maintaining a pension trust to provide for the payment of reasonable pensions to his employees, if such trust is exempt from tax under R.S. 47:185, relating to trusts created for the exclusive benefit of employees, shall be allowed as a deduction in addition to the contributions to such trust during the taxable year to cover the pension liability accruing during the year, allowed as a deduction under R.S. 47:62, a reasonable amount transferred or paid into such trust during the taxable year in excess of such contributions, but only if such amount (1) has not theretofore been allowed as a deduction, and (2) is not in excess of ten per centum of the cost which would be required to completely fund the service credits of all employees under the plan, computed in accordance with the rules and regulations of the collector; provided that amortization may be continued as to any payments previously made and remaining unamortized as of January 1, 1950. Whenever the limitation of clause (2) above applies, the excess of the amount paid over the ten per cent limitation shall be carried forward to subsequent years and treated as a payment during each succeeding year until it shall have been fully deducted under the ten per cent limitation hereinabove prescribed.

Legislative History

Amended by Acts 1950, No. 445, §1.