Last chance for some companies to amend incentives to secure 162(m) deductions

Employers that want to deduct incentives granted to executives in 2010 without hitting Section 162(m)’s $1 million cap on deductible pay should act now to review these arrangements. Incentive plans that guarantee payment on termination for good cause, involuntary termination or retirement may not qualify as performance-based compensation exempt from the 162(m) limit. IRS transition relief for many arrangements expires at the end of 2009.  (Select News, 23 Oct 2009)

• Full text of Rev. Rul. 2008-13 (IRS, 21 Feb 2008) (PDF)

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