Gain an understanding of when an employer may take a tax deduction for an annual bonus and deferred compensation payments.
Many employers do not fully understand all of the events and timing considerations that impact when an annual bonus or deferred compensation payment to a service provider may be deducted by the employer. Additionally, employers often struggle with determining which entity is entitled to the tax deduction for compensation paid to service providers upon a merger or acquisition. Finally, employers typically have questions with respect to the impact of 162(m) and how to apply the rules in certain circumstances. This topic helps employers determine when an annual bonus payment or payment of deferred compensation to a service provider may be deducted and understand each of the determining factors. The material also explains compensation issues typically encountered upon a merger or acquisition. Additionally, the material covers the latest guidance with respect to 162(m) and provides examples of how to apply the rules. Finally, the material addresses taxation and accounting methods for equity-based compensation.
Learning Objectives
- You will be able to identify Bonuses and Deferred Compensation characteristics
- You will be able to recognize the requirements of Equity-Based Compensation
- You will be able to identify the standards of Section 162(m)
- You will be able to recognize Mergers and Acquisitions best practices.
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Why Lorman?
Over 39 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.
Agenda
Deduction Timing of Annual Bonuses and Deferred Compensation
- General Rule
- Exceptions
- All Events Test
- IRS Guidance and Case Law
- Examples
Equity Compensation
- Taxation of Equity-Based Awards (Including Section 83(b) Elections)
- Accounting for Equity-Based Awards
- Examples
Section 162(m) Deduction Limitation
- Overview
- Latest Guidance
- Examples
Compensation in Special Circumstances (Termination, M&A, etc.)
- Overview
- Who Gets the Deduction
- Market Practices
- Examples
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Why Lorman?
Over 39 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.
Credits
OnDemand Course
This course was last reviewed on February 18, 2025.
Call 1-866-352-9540 for further credit information.
- AIPB 2.0
- This program is acceptable for 2.0 CPEC(s) towards the CB designation through the American Institute of Professional Bookkeepers (AIPB).
- AK CLE 1.5
- Alaska attorneys may receive 1.5 hour(s) of continuing legal education for completing this program. Please contact the Alaska Bar Association or go to www.alaskabar.org for details regarding reciprocity with other states.
- AL CLE 1.7
- This course or a portion thereof has been approved by the Alabama State Mandatory Continuing Legal Education Commission for a maximum of 1.7 hour(s) credit.
- Arizona CLE 1.5
- The Arizona State Bar does not pre-approve or pre-certify MCLE programs. However, records of this program and attendance will be maintained by Lorman Education Services/Noggin Guru for auditing purposes. This activity may qualify for up to 1.5 hour(s) toward your annual CLE requirement for the State Bar of Arizona.
- CA MCLE 1.5
- Lorman Education Services/Noggin Guru is a State Bar of California approved MCLE sponsor and this course qualifies for 1.5 CLE hour(s) of participatory credit.
- CT CLE 1.5
- Neither the Connecticut Judicial Branch nor the Commission on Minimum Continuing Legal Education approve or accredit CLE providers or activities. This course has been approved for CLE credit in jurisdictions aside from CT and therefore it automatically meets the content and delivery requirements in Connecticut. Credit is based on a 60 minute credit hour and shall be awarded as follows: 1.5 CLE credit(s).
- GA CLE 1.5
- This program has been approved by the Georgia Commission on Continuing Lawyer Competency for 1.5 CLE hour(s).
- MO CLE 2.0
- This course qualifies for self-study CLE credit in Missouri.
- NM CLE 1.6
- This program has been approved by the New Mexico Minimum Continuing Legal Education Board for 1.6 hour(s) of credit.
- VT CLE 1.5
- This self-study program has been approved by the Mandatory Continuing Legal Education Board of Vermont for 1.5 hour(s) of CLE credit. Please note: Attorneys may only claim 12 credits per compliance period in this format. This course is considered "Non-Moderated Programming without Interactivity".
Enrolled Agents 2.0
- In accordance with the standards set forth in Circular 230 section 10.6, CE credits have been granted based on a 50-minute hour. This program qualifies for 2.0 Continuing Education Credit(s) for enrolled agents.
To earn each credit Lorman offers through the OnDemand learning platform, you need to watch 100% of the program. Also, for certain credits you will need to fulfill additional requirements which will be displayed on the "credits" tab when viewing the course.
This program does NOT qualify, nor meet the National Standard for NASBA accreditation.
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Why Lorman?
Over 39 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.
Faculty
Riley Dinh
Alvarez & Marsal
- Manager in the compensation and benefits practice at Alvarez & Marsal Tax, LLC
- Practice emphasizes all aspects of executive compensation and employee benefits
- Helps companies tackle how to effectively and efficiently pay, incentivize, and retain their employees
- Works with companies to design and benchmark annual bonus and long-term incentive compensation programs, all while considering the applicable tax, accounting, and other regulatory ramifications
- Certified Public Accountant (CPA) licensed in Texas
- LL.M. Degree, International and Comparative, SMU Dedman School of Law; M.S. Degree in accounting, SMU Cox School of Business; B.B.A. in accounting, SMU Cox School of Business
Angela M. Stockbridge
Locke Lord LLP
- Associate, Locke Lord, LLP
- Practice emphasizes 409A compliance, equity compensation design, and retirement and welfare plan oversight
- Provides advice to both executives and employers on matters including change in control agreements, deferred compensation arrangements, all types of equity-based compensation plans, nonqualified deferred compensation design, qualified plan corrections and compliance advice, welfare plan administrative advice, and training related to fiduciary duties and HIPAA
- Experience with publicly traded and privately held companies across all benefits and executive compensation matters, including creation of change in control plans for executives, contract negotiations, claims & appeals, and benefits guidance throughout M&A activity
- Previous experience as in-house ERISA and executive compensation counsel for multiple Fortune 500 companies
- Admitted to practice in Texas
- J.D. degree, Cornell Law School; B.A. degree, University of Texas
- Can be contacted at [email protected] or 214-740-8402
Ryan Wells
Alvarez & Marsal
- Senior Director in the compensation and benefits practice at Alvarez & Marsal Tax
- Practice emphasizes all aspects of executive compensation and employee benefits
- Helps companies tackle how to effectively and efficiently pay, incentivize, and retain their employees
- Works with companies to design and benchmark annual bonus and long-term incentive compensation programs, all while considering the applicable tax, accounting, and other regulatory ramifications
- Focuses on mergers and acquisitions (including golden parachute rules and due diligence of compensation arrangements), initial public offerings, and bankruptcy compensation
- Author and key contributor to several publications related to executive compensation
- Certified Public Accountant (CPA) licensed in Texas
- M.A. degree in professional accounting, The University of Texas at Austin; B.B.A. in accounting, The University of Texas at Austin
- Can be contacted at [email protected] or 940-704-6250
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Why Lorman?
Over 39 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.
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