[firm] blog logo

December 31st Deadline to Amend Deferred Compensation Plans

The 2017 Tax Cuts and Jobs Act (the “TCJA”) significantly amended Section 162(m) of the Internal Revenue Code (“Code”) by expanding the definition of a “covered employee” to also include an employee who was formerly a “covered employee” of the publicly traded corporation (i.e., the “once a covered employee, always a covered employee” rule). Under this expanded rule, anyone who was a covered employee of the publicly traded corporation (or any predecessor) for any taxable year beginning on or after January 1, 2017, will continue to be a covered employee for taxable years beginning in 2018 and later, even after the employee’s separation from service. This change potentially impacts the availability of benefit payments under certain nonqualified deferred compensation plans which provide that payments may be delayed if the company’s deduction would not be permitted under Code Section 162(m). The application of this “once-in, always-in rule” could thus result in a… Continue Reading

December 2020
S M T W T F S
« Nov   Jan »
 12345
6789101112
13141516171819
20212223242526
2728293031  

Archives