Sec. 3. Special rules for tax treatment of executive compensation for employers participating in certain coronavirus relief programs
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/bill/116/s/3526/is/section-3A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
Section 162(m) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph: In the case of an applicable employer, no deduction shall be allowed under this chapter— in the case of applicable remuneration for any applicable taxable year which is attributable to services performed by a covered individual during such applicable taxable year, to the extent that the amount of such remuneration exceeds $500,000, or in the case of deferred deduction remuneration for any taxable year for services performed during any applicable taxable year by a covered individual, to the extent that the amount of such remuneration exceeds $500,000 reduced (but not below zero) by the sum of— the applicable remuneration for such applicable taxable year, plus the portion of the deferred deduction remuneration for such services which was taken into account under this clause in a preceding taxable year.
For purposes of this paragraph— The term applicable employer means any employer from whom one or more assets are purchased or guaranteed in accordance with section 2 of the Protecting Taxpayer's Return on Investment Act of 2020 . Two or more persons who are treated as a single employer under subsection
(b)or
(c)of section 414 shall be treated as a single employer, except that in applying section 1563(a) for purposes of either such subsection, paragraphs
(2)and
(3)thereof shall be disregarded. For purposes of this paragraph, the term applicable taxable year means, with respect to any employer— the first taxable year of the employer in which the Secretary has purchased or guaranteed an asset of the employer in accordance with section 2 of the Protecting Taxpayer's Return on Investment Act of 2020 , and any subsequent taxable year ending before the date on which the Secretary sells the assets associated with the employer or no longer guarantees the assets associated with the employer, as the case may be. For purposes of this paragraph, the term covered individual means any individual who has performed services (directly or indirectly) for the applicable employer (or any predecessor). For purposes of this paragraph, the term applicable remuneration means the applicable employee remuneration of the covered individual, as determined under paragraph
(4)without regard to subparagraph
(B)thereof. Such term shall not include any deferred deduction remuneration with respect to services performed in a prior applicable taxable year. For purposes of this paragraph, the term deferred deduction remuneration means remuneration which would be applicable remuneration for services performed in an applicable taxable year but for the fact that the deduction under this chapter (determined without regard to this paragraph) for such remuneration is allowable in a subsequent taxable year. Rules similar to the rules of subparagraphs (D), (E), and
(F)of paragraph
(4)shall apply for purposes of this paragraph. The Secretary may prescribe such guidance, rules, or regulations as are necessary to carry out the purposes of this paragraph, including the extent to which this paragraph applies in the case of any acquisition, merger, or reorganization of an applicable employer. . The amendment made by this section shall apply to taxable years beginning after December 31, 2019.