Internal Revenue Code §162(m) imposes limitations on the deductibility of executive pay by public corporations. The new tax law, Public Law No. 115-97 (the “Tax Cuts and Jobs Act” (TCJA)), makes a number of changes in Code §162(m). These changes generally take effect for taxable years commencing after Dec. 31, 2017 (exceptions noted below). Today’s column discusses these changes, how the changes might impact on different forms of executive pay and some of the steps public corporations need to take in light of these changes.

Code §162(m) Before and After TCJA

Pay Subject to the Deduction Limitation