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Law, Explanation and Analysis of the Tax Cuts and Jobs Act of 2017

By Wolters Kluwer Editorial Staff
Softcover Book

Softcover Book

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A Guide to the Retirement Benefit Plans, Executive Compensation, Employee Benefits and Payroll Provisions

On December 22, 2017, President Trump signed into law the Tax Cuts and Jobs Act of 2017 (P.L. 115-97). The Act represents the most sweeping tax legislation in 30 years and will affect nearly every individual, business owner, and corporate taxpayer in the United States. While the law does not radically uproot pension and benefits arrangements, the new rules will present employers, employees, and tax and benefits professionals with potentially difficult decisions in the areas of retirement planning. ‘

Among the changes demanding immediate attention, the Act: repeals the rule permitting Roth IRA recharacterizations, imposes an excise tax on the excess compensation of executives of tax-exempt organizations, provides a new income deferral election for qualified equity grants, limits the $1 million deduction limit on executive compensation by removing the exclusion for performance based compensation, expands the contribution options under 529 plans, repeals the limited employer deduction for certain fringe benefits (such as entertainment), eliminates the deduction for qualified transportation fringe benefits, suspends the income exclusion for moving expense reimbursements, eliminates the individual mandate penalty enacted under the Affordable Care Act, provides a temporary employer credit for paid family and medical leave, substantially alters the personal income tax rates, (which will lead to significant modification of the applicable income tax withholding rates), and radically changes the standard deduction and personal exemptions allowed under pre-2018 law.

While the scope of the Act is vast, one of the more surprising aspects of the legislation as enacted, from a retirement plan and executive compensation perspective, is the limited nature of the changes, especially when compared to proposed reforms that had been included in previous incarnations of the Act. For example, the Act does not curtail the 401(k) deferral and contribution limits or impose excise taxes on high income retirement savers. However, while the rules governing retirement plans may not be directly affected by the law, the modification and expansion of the deduction for pass-through income could have a serious effect on currently maintained retirement plans. Concern has emerged that the new pass-through rules could effectively function as a disincentive to small employers to the establishment and continued maintenance of qualified plans.

The Law, Explanation and Analysis of the Tax Cuts and Jobs Act of 2017 provides a detailed analysis of the provisions of the Act affecting retirement plans, executive compensation, employee benefits and payroll administration. Expert guidance provided by recognized benefits professionals highlight the immediate impact of the changes and will help navigate pressing issues, such as: advisability of Roth conversions, the financial benefits of maintaining a qualified plan, the structure of executive compensation arrangements, the schedule of compensation payments to executives, the viability of employer provided fringe benefits, and income tax withholding.

Publish Date 12/29/2017
Product Line Wolters Kluwer Legal & Regulatory U.S.
ISBN 9781454898757
SKU 10060517-0001