The Treasury Department and IRS today released for publication in the Federal Register final regulations (T.D. 9716) relating to the deduction limit for certain employee remuneration in excess of $1 million.
Today’s regulations [PDF 227 KB] finalize regulations that were proposed in June 2011, to clarify the effects of stock-based compensation plans of publicly held corporations on the $1 million limitation for employee remuneration under section 162(m).
The final regulations reflect changes made in response to comments—changes that are intended to clarify provisions and not intended to be substantive changes.
A notice of proposed rulemaking (REG-137125-08) was issued in June 2011 concerning the deduction limitation for employee remuneration in excess of $1 million. The preamble to the proposed regulations stated that these regulations were not intended to make substantive changes to the existing regulations under section 162(m) but were intended to:
The preamble to today’s final regulations notes that comments were received concerning the 2011 proposed regulations.
In response to some of the comments, changes have been accepted and made to the final regulations, including:
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