The Treasury Department and Internal Revenue Service issued proposed regulations to reflect changes from the Tax Cuts and Jobs Act (TCJA) on the tax deductibility of officers’ compensation by publicly held corporations.

On Aug. 21, 2018, the Treasury Department and IRS released Notice 2018-68. This notice provided initial guidance on this deduction limitation.

Section 162(m) disallows the deduction by any publicly held corporation for compensation paid in any   taxable year to a covered employee that exceeds $1 million.  The proposed regulations update the definitions of covered employee, publicly held corporation and applicable employee compensation.

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