With all of the press about the new tax reform legislation and the proposed changes to the corporate tax rates, many companies might be considering strategies for accelerating deductions into earlier years to take advantage of those deductions in a year when the tax rates may be higher than in future years. One strategy
If your company is transferring employees to the U.S., be sure to review any outstanding equity grants and other awards of compensation (such as deferred bonuses) that they previously received under home country compensation plans that vest and are payable after they arrive in the U.S. In many cases, a company must amend the terms of such awards to comply with the Internal Revenue Code’s deferred compensation rules (Internal Revenue Code Section 409A) no later than the last day of the first year in which the transferred employees become U.S. tax residents. Failing to do so could result in a big tax bill for these employees down the road, which companies often end up paying, as well as a tax gross-up.