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ARTICLE · 02 JANUARY 2020

New Section 162(m) Proposed Regulations

Herbert Smith Freehills Kramer LLP
Herbert Smith Freehills Kramer LLP
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Herbert Smith Freehills Kramer LLP

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The Tax Cuts and Jobs Act of 2017 (TCJA) made significant changes to Section 162(m) of the Internal Revenue Code (Section 162(m)),

United StatesEmployment and HR
Marissa J. Holob
Marissa J. Holob
Avram J. Cahn
Avram J. Cahn
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The Tax Cuts and Jobs Act of 2017 (TCJA) made significant changes to Section 162(m) of the Internal Revenue Code (Section 162(m)), expanding the scope of individuals and entities subject to Section 162(m), in addition to eliminating the exclusion for performance-based compensation. Last week, Proposed Regulations1 were published that confirm the broad scope of amended Section 162(m) and the relatively narrow scope of the grandfather provisions.

Section 162(m) limits employer deductions to the first $1 million of applicable employee remuneration paid by a publicly held corporation to a covered employee. Under the Proposed Regulations, each of these components is broadly defined.

Publicly Held Corporation

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