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House Passes Tax Reform Bill

On November 16th, the U.S. House of Representatives passed its tax reform bill by a vote of 227 to 205.

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The tax reform bill approved by the full House does not substantively differ from the bill previously approved by the House Ways and Means Committee, as described in our Client Updates dated November 7, 2017 and November 10, 2017. Therefore,…

Senate Proposal on Tax Reform

On the heels of the House tax proposal, the Senate Republicans released their own tax reform proposal on November 9, 2017. The Senate tax proposal departs from the House Republicans’ tax proposal in several significant respects, including with regard to the effective date of the change in corporate tax rates. Generally, the Senate Republicans’ proposed changes to the Internal Revenue Code (“Code”) would be effective for tax years beginning after 2017. However, under the Senate tax proposal, the change in the corporate income tax rate would first become effective in 2019, while under the House tax proposal this change would first become effective in 2018.

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We expect further changes to be made in both the House and Senate tax proposals. Ultimately, any differences between the House and Senate proposals would need to be addressed during the reconciliation process. This Update first summarizes the Senate tax…

House Tax Bill Amendment Removes Controversial Provision on Nonqualified Deferred Compensation

The House Ways and Means Committee amended the House tax reform bill to eliminate the proposed and potentially sweeping changes to the tax treatment of nonqualified deferred compensation plans and certain equity awards.

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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…

Proxy Tabular Disclosure

Meridian explains tabular disclosures required in proxies, with annotated examples.

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The Basics Overview In 2006, the SEC dramatically changed proxy disclosure requirements. Six required tables provide a quantitative picture of companies’ executive pay in the prior one to three years. Companies must generally disclose compensation amounts for the top five…

Nonqualified Deferred Compensation

Meridian answers your questions about nonqualified deferred compensation.

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Overview A nonqualified deferred compensation plan represents an unsecured promise by an employer to pay compensation to an employee at a future date. Such a plan is not subject to the complex rules under ERISA that are applicable to tax-qualified…

Taxation of Deferred Compensation under IRC Section 409A

Meridian breaks down the complicated tax regulations surrounding nonqualified deferred compensation.

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The Basics What is the rule? Section 409A of the Internal Revenue Code establishes a complex regime for taxation and regulation of nonqualified deferred compensation. Who does it apply to? The reach of Section 409A is extensive, as it applies…

The End of Deferred Compensation?

Proposed Legislation Could Render the Tax Saving Effectiveness of Deferred Compensation Inert

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Our last post introduced some thoughts around proposed legislation by the Republican Chair of the House Ways and Means Committee that would effectively end tax deductibility of compensation under IRC Section 162(m). I’d like to explore the other aspect of…

House Bill Will Eliminate Tax Exemption

Congressional Interest in Curtailing the Tax Deductibility of Executive Compensation Appears to Be Heating Up

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Identical bills have been introduced in the Senate and House that would extend the reach of the $1 million deduction limit under Section 162(m) of the Internal Revenue Code (“Code”) to all employees and would eliminate the exemption for performance-based…