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(1) Internal Revenue Code (IRC) Section 162(m) limits a publicly held corporation’s deduction to $1 million per year for compensation paid to its covered employees.
1 gru 2023 · Sec. 162(m) now strictly limits public companies’ tax deduction for compensation of covered executives to $1 million per individual. Further, Congress expanded the number of executives covered by Sec. 162(m), in 2017, with a subsequent expansion set to take effect in 2027.
The excess-compensation component of IRC Section 4960 is loosely based on the $1 million deduction limit under IRC Section 162(m), which applies to compensation a publicly held corporation pays to certain officers.
Under the proposed regulations, IRC Section 162(m) would not be limited to compensation paid to a covered employee for services as an employee, but instead would also include compensation for services the individual rendered as an independent contractor.
23 gru 2020 · Section 162(m) generally limits the deductibility of compensation paid to certain “covered employees” of a publicly held corporation to $1 million per year. Before the Act was implemented, payments of qualified performance-based compensation made to covered employees were exempt from the $1 million annual limitation.
Compensation for Section 162(m) purposes is the aggregate amount paid to the executive: For services performed as a covered employee. That is allowed as a deduction by the corporation for the taxable year (determined without regard to the $1 million limit imposed by Section 162(m)).
25 mar 2021 · Internal Revenue Code (IRC) Section 162 (m) disallows deductions for publicly traded companies that pay over $1 million in compensation to its “covered employees”—CEO, CFO and the next three most highly compensated officers.
