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The Senate-passed version of the tax bill would provide minor relief from the Alternative Minimum Tax (AMT) by allowing the enhanced child credit to be claimed against the AMT. Refundable tax credits would no longer be disallowed as well under AMT calculations.

The Republican tax proposal released on November 1 does not contain provisions that will directly affect ESOPs. There had been some concern that the plan would make changes to retirement plan law, but no significant modifications were proposed.

The 2006 tax bill recently passed by Congress contains a provision allowing individuals who paid the alternative minimum tax (AMT) on the exercise of stock options to take a tax credit of 20% (or, if the original credit is less than $25,000, $5,000 or the full amount of the credit, whichever is l

Two bills to amend the treatment of U.S. corporate income earned overseas that have significant provisions affecting ESOPs and equity compensation continue to face an uncertain fate. The American Jobs Creation Act of 2004 (H.R. 4520) and the Jumpstart Our Business Strength Act (S.

Both the American Jobs Creation Act of 2004 (H.R. 4520) and the Jumpstart Our Business Strength Act (S.

Neither the House nor Senate tax cut bills now being debated contain the President's proposal to require ESOPs in S corporations to pay unrelated business income tax (UBIT) on their pro-rata share of company earnings.

The new tax bill passed by Congress (and to be vetoed by the President) preserves the ability for most S Corporation ESOPs to avoid paying unrelated business income tax (UBIT) on their pro-rata share of corporate earnings.

On May 5, 2021, the House Ways and Means Committee unanimously passed the SECURE Act 2.0 (H.R. 2954).The bill makes a number of changes to retirement plan law but, unlike the version introduced last year, does not include a provision allowing owners of S corporation ESOPs to get the same Section 1042 tax deferral on the sale of stock to an ESOP trust as owners of C corporation ESOPs can.

Robert Willens, the ubiquitously quoted tax analyst at Lehman Brothers, told the Wall Street Journal on April 9 that ESOP S corporations would be the "wave of the future" in merger and acquisition transactions.

Business owners frequently choose to operate as a limited liability company (LLC) because it provides for a less formal governance structure and the option to be taxed as a partnership. But the downside for LLC owners considering an ESOP is that an ESOP must be invested primarily in “employer securities” and LLC membership interests don’t count. The solution is to convert the LLC into a corporation.