Attention Incentive Planners: Employee Awards Might Soon Be Taxed
Phil Mooney December 4, 2017 Attention Incentive Planners: Employee Awards Might Soon Be Taxed2017-12-04T13:38:55+00:00 News
by Lisa A. Grimaldi | November 29, 2017
The Incentive Federation, the advocacy group representing the incentive industry, has issued an update on the status of a Congressional proposal to repeal section 274(j) of the tax code, which gives firms preferential exclusion from taxes for employee service and safety awards.
In a statement, the organization said, “For the past few weeks, George Delta, the Incentive Federation’s legal counsel, has been closely monitoring the two tax-simplification and reform acts proposed in the U.S. House of Representatives and the U.S. Senate. If you have followed the news, you are aware that the House passed its version of the Tax Cuts and Jobs Act on Nov. 16. That bill includes a provision that repeals 274(j) and therefore the preferential exclusion from taxes for employee service and safety awards. That’s the bad news.
“The good news is that the U.S. Senate Finance Committee completed its markup of the Tax Cuts and Jobs Act and voted it out of the committee, also on Nov. 16. The Senate bill does not have a corresponding provision to repeal 274(j).
We were aware that the Senate bill did not propose to repeal 274(j), and we want now to encourage and thank the members of the Senate Finance Committee for being supportive of our interests.
“The Senate Majority leader has said he would ask the full Senate to consider the bill after Thanksgiving. If the bill is passed, and that’s no certainty, the Senate and the House will have a conference committee to work out the differences between the two versions of the bill. When the full Senate considers the bill after Thanksgiving, and especially when the conference committee begins its work, there’s a good prospect that some effort to repeal 274(j) could be brought forward, so we’ll have to stay alert.”