The Conference Committee version of the Tax Cuts and Jobs Act, which is likely to be the final version the House and Senate vote on and then deliver to the President, is identical to the final versions that previously came out of the House and Senate in that it:

  • Reduces corporate tax rates [think acceleration of deductions!]
  • Does not touch 409A or deferred compensation
  • Eliminates the performance-based compensation exception to Section 162(m)
  • Extends the $1 million cap of Section 162(m) to certain private companies that file reports with the SEC
  • Extends the $1 million cap of Section 162(m) to the company’s CFO
  • Applies the “once a covered employee always a covered employee” rule to anyone who was a covered employee of the company after December 31, 2016 (even to payments made after death)
  • Includes new Code Section 83(i), which allows for the deferral of taxation of certain broad-based stock awards at private companies

These changes apply to taxable years beginning after December 31, 2017, except to compensation paid pursuant to a written binding contract that was in effect on November 2, 2017, and that was not modified in any material respect on or after that date. There is still time to act!