IRS Prop. Reg.: Certain Employee Remuneration in Excess of $1 Million Guidance (IRC §162)

Proposed regulations under I.R.C. §162(m), which limits the deduction for certain employee remuneration in excess of $1,000,000 for federal income tax purposes, the IRS released. These proposed rules implement the amendments made to §162(m) by the American Rescue Plan Act of 2021. These proposed regulations would affect publicly held corporations. Effective for taxable years beginning after Dec. 31, 2026, the American Rescue Plan Act of 2021, Pub. L. No. 117-2, expanded the definition of covered employee for taxable years beginning after Dec. 31, 2026. The ARP amended the definition of “covered employee” by adding §162(m)(3)(C), which includes any employee who ...