Final regulations: Deduction for employee remuneration in excess of $1 million (text of regulations)

Final regulations

The IRS today posted to its website a version of final regulations (T.D. 9932) concerning provisions under section 162(m) that limit the deduction for certain employee remuneration in excess of $1 million for federal income tax purposes.

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The final regulations [PDF 507 KB] (109 pages) are intended to implement changes made to section 162(m) by the 2017 tax law (Pub. L. No. 115-97)—the legislation that is often referred to as the “Tax Cuts and Jobs Act.”

The version of the final regulations posted by the IRS today includes the following statement:

This document will be submitted to the Office of the Federal Register (OFR) for publication and will be pending placement on public display at the OFR and publication in the Federal Register. The version of the final regulations released today may vary slightly from the published document if minor editorial changes are made during the OFR review process. The document published in the Federal Register will be the official document.

Proposed regulations under section 162(m) were published in the Federal Register in December 2019. Read KPMG’s initial impressions about the proposed regulations: TaxNewsFlash

According to the preamble, today’s release finalizes the proposed regulations with modifications in response to certain comments and testimony.

The purpose of this report is to provide text of the final regulations.

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

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