Section 162(m) and the Impact of the American Rescue Plan Act of 2021

Bloomberg's Tax Management Compensation Planning Journal

Jameson G. Frazier

Partner Regina Olshan and associate Jameson Frazier examine the expansion of Section 162(m) under the American Rescue Plan Act of 2021, which was signed into law by President Biden in March 2021. Section 162(m) generally limits the deductibility of compensation paid by a publicly held corporation to "Covered Employees" to $1 million per year. Under ARPA, the term "Covered Employees" has been expanded from at least five officers to at least 10 officers and employees.