US Tax Reform significantly changed the rules governing the US$1 million limit on deductible executive compensation for publicly held and certain other corporations. The Internal Revenue Service (IRS) recently published guidance to assist in the implementation of these changes. The guidance, Notice 2018-68, also requests comments on a number of other issues. Additional guidance, in the form of proposed regulations, is expected in the future.
This update explains key points in the IRS notice, including important grandfathering rules.