IRS issues transition guidance for new executive compensation deduction limit

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Overview

The 2017 tax reform act made significant changes to the $1 million tax deduction limitation for publicly held corporations under section 162(m) that included repealing an exclusion for qualified performance based compensation and for commissions and broadening the scope of the deduction limitation. IRS Notice 2018-68 provides initial guidance on the application of section 162(m), as amended. The Notice broadens the group of possible covered employees subject to the deduction limit and narrows the scope of transition relief.

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Kelley McLaughlin

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