EMPLOYEE PLANS, INCOME TAX

T.D. 9932, page 345. Section 162(m)(1) of the Internal Revenue Code generally limits to $1,000,000 the allowable deduction for a taxable year for applicable employee remuneration paid by any publicly held corporation with respect to a covered employee. The final regulations provide guidance on the application of §162(m), as amended by section 13601 of Tax Cuts and Jobs Act (the Act). The Act made significant amendments to §162(m), and provided a transition rule applicable to certain outstanding arrangements (commonly referred to as the grandfather rule). The final regulations provide guidance on the amendments made by the Act to the definitions of publicly held corporation, covered employee, and applicable employee remuneration. Additionally, the final regulations provide guidance on the operation of the grandfather rule, including when a contract will be considered materially modified so that it is no longer grandfathered.

Finding Lists begin on page ii.