EMPLOYEE PLANS, INCOME TAX

REG-101268-24, page 836. These proposed regulations would provide guidance for retirement plans that permit participants who have attained age 50

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to make additional elective deferrals (catch-up contributions) under section 414(v) of the Code. Specifically, these proposed regulations would amend the regulations under sections 414(v), 401(k), and 403(b) to reflect statutory changes made by section 603 of the SECURE 2.0 Act of 2022 (SECURE 2.0 Act), which require that catch-up contributions made by certain catch-up eligible participants be designated Roth contributions. These proposed regulations also would amend the regulations under section 414(v) of the Code to reflect the statutory changes made by sections 109 and 117 of the SECURE 2.0 Act, which increase the catch-up contribution limits under section 414(v) of the Code in certain cases.

REG-118988-22, page 869. Section 162(m)(1) 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. Section 9708 of the American Rescue Plan Act of 2021 (ARP) (Pub. L. 117-2, 135 Stat. 206 (2021)) amended the definition of “covered employee.” In addition to the principal executive officer, principal financial officer, and the three other highest compensated executive officers for the taxable year or any previous taxable year, ARP added §162(m)(3)(C) to expand the definition of “covered employee” to include any other employee who is among the five highest compensated employees for the taxable year. This amendment is effective for taxable years beginning after December 31, 2026. The proposed regulations propose guidance on the application of §162(m) as amended by section 9708 of ARP.