This means that the current tax law treatment of nonqualified deferred compensation and equity awards, such as RSUs, PSUs, SARs and nonqualified stock options, remains unchanged. However, the House tax bill changes to Section 162(m) of the Interal Revenue Code (e.g., elimination of performance-based compensation exceptions) were not affected by the amendment to the House tax bill. The changes to Code Section 162(m) are further described in our Client Update dated November 7, 2017.
We will be issuing a Client Update on the Senate’s proposed tax bill and other changes made to the House proposed tax bill in the near future.
Meridian Comment. The action by the House Ways and Means Committee is a welcome development. However, the legislative process took another odd twist yesterday when the Senate released its proposed tax bill, which includes nearly identical provisions relating to tax treatment of nonqualified deferred compensation (including certain equity awards) that were struck from the House tax bill. Given what occurred with the House tax bill, it would not be surprising if the provisions on nonqualified deferred compensation were eventually stripped from the Senate tax bill. However, that is not a certainty. We should know more next week as the Senate begins to mark-up its tax proposal.
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The Client Update is prepared by Meridian Compensation Partners’ Technical Team led by Donald Kalfen. Questions regarding this Client Update or executive compensation technical issues may be directed to Donald Kalfen at 847-235-3605 or firstname.lastname@example.org.
This report is a publication of Meridian Compensation Partners, LLC, provides general information for reference purposes only, and should not be construed as legal or accounting advice or a legal or accounting opinion on any specific fact or circumstances. The information provided herein should be reviewed with appropriate advisors concerning your own situation and issues.