.
Blogs | Tax Bill
California Conforms to Section 162(m) of the Federal Tax Code
By Dina Bernstein, Samantha Nussbaum
For federal tax purposes, the Tax Cuts and Jobs Act, enacted in 2017, resulted in significant changes to Section 162(m) of the Internal Revenue Code. Notably, this eliminated the qualified performance-based compensation exception to the $1 million annual limitation...
Application of New Corporate Tax Rate to Fiscal Year Companies, Part II
By Samantha Nussbaum, Bindu Culas
Under the recently enacted Tax Cuts and Jobs Act, the new 21% corporate tax rate applies on a blended basis to fiscal year companies (i.e., companies whose taxable years do not end on December 31st). The IRS has now issued guidance for how fiscal year companies can calculate the amount of federal...
Section 162(m) and State Conformity to the Federal Tax Code
By David Gordon, Samantha Nussbaum
While the performance-based compensation exception to the $1 million compensation limit under Internal Revenue Code Section 162(m) for “covered employees” is a thing of the past (absent grandfathered contracts) for federal income tax purposes, practitioners are realizing that Section 162(m) may continue...
ISS and the Recent Changes to IRC Section 162(m)
By Samantha Nussbaum, Lanaye Dworak
On January 12, ISS Analytics published an interview with ISS’ Head of U.S. Compensation Research intended to provide insight into how ISS will assess changes in compensation practices as a result of the recent legislative modifications to IRC Section 162(m). ISS states it will be closely monitoring...
Application of New Corporate Tax Rate to Fiscal Year Taxpayers/New Supplemental Withholding Rates
By David Gordon
This blog discusses two issues raised by the tax rate changes in the recently enacted tax bill: (1) how the new corporate tax rate applies to fiscal year (i.e., non-calendar year) corporations and (2) the new individual tax withholding rates on supplemental income...
Year-End Executive Compensation Planning
By Kenneth Sparling, David Gordon, Bindu Culas
With tax reform now approved and expected to soon be signed into law, companies are evaluating year-end strategies for 2017 bonuses in light of the reduction in the corporate tax rate beginning next year and changes to the deductibility of compensation provided to certain executive officers...
Tax Bill Update: Where Are We Now?
By Samantha Nussbaum, Bindu Culas
Comprehensive tax reform legislation was introduced on November 2, 2017, and is currently working through Congress. The House version was passed on November 16 and the Senate version was passed on December 2. Both versions generally align on most executive compensation-related provisions, but...
Tax Bill Alert: Welcome Relief as New Deferred Compensation Rule Also Deleted from Senate Bill
By David Gordon, Kenneth Sparling
Last night, Senate Finance Committee Chairman Hatch released the first amendments to the Senate’s version of the Tax Cuts and Jobs Act. Amendments related to executive compensation largely mirror changes that were made to the House version of the bill last week. An important change was the deletion...
Tax Bill Alert: Newly Released Senate Version of Tax Bill Retains Troublesome Deferred Compensation
By David Gordon, Kenneth Sparling
Yesterday evening, Senate Finance Committee Chairman Hatch released details of the Senate’s version of the Tax Cuts and Jobs Act. The most notable development for executive compensation is that the Senate bill generally contains the same executive compensation related provisions that were included...
Tax Bill Alert: Section 409A Deferred Compensation is Preserved Under House Amendment
By Bindu Culas, Samantha Nussbaum
Today, House Ways and Means Committee Chairman Brady released an amendment that impacts several provisions of H.R. 1. Most notably for executive compensation, the amendment strikes Section 3801 of H.R. 1 (which introduced a new “Section 409B”), thereby preserving the current-law tax treatment...
Executive Compensation Landscape Could Change Dramatically Under Proposed Tax Bill
By Samantha Nussbaum, David Gordon, Bindu Culas
On November 2, the House Ways and Means Committee released the “Tax Cuts and Jobs Act” (H.R. 1). On November 3, House Ways and Means Chairman Kevin Brady released a “Chairman’s Mark” of H.R.1, which clarified a few points but did not seem to alter the material proposals...