A bill to amend section 457 of the Internal Revenue Code of 1954 to extend to deferred compensation plans maintained by tax exempt organizations the treatment conferred upon such plans maintained by State and local governments by the Revenue Act of 1978.

Amends the Internal Revenue Code to provide that compensation paid to an employee of a tax-exempt organization which is deferred under a compensation plan maintained by such an organization shall be includible in the gross income of the participant or beneficiary of such a plan only in the year in which the compensation is paid to the participant or beneficiary. Permits the deferral of the lesser of $7,500 or one-third of such employee's compensation in any taxable year. Permits the deferral of up to $15,000 ("catch-up exclusion") of compensations for any employee who did not utilize the $7,500 or one-third deferral limitation in the previous taxable years, if such employee is within three years of normal retirement age.

States that the provisions of this Act shall apply to tax-exempt organizations in taxable years beginning after December 31, 1979.