Buzz Archive:
Restricted stock: The Tax Impact On Employers and Employees - Part 4 of 4

by G. Edgar Adkins, Jr., and Jeffrey A. Martin of Grant Thornton LLP, 4/15/2008

Restricted stock is growing in popularity as a method to compensate employees, primarily as a result of changes in generally accepted accounting principles (GAAP) that went into effect in 2006. An important aspect of this compensation tool is the income tax treatment, from both a corporate (i.e., employer) and individual (i.e., employee) perspective. The discussion below addresses not only the direct tax treatment - i.e., the recognition of income by the employee and the deduction by the employer - but also related tax issues. These include the effect of restricted stock on the $1 million deduction limit that applies to public companies under Section 162(m) and the treatment of restricted stock in determining eligibility for S corporation status.

And in no accidental timing, (it's tax day in the U.S.), we are running the fourth of a four part series, where G. Edgar Adkins, Jr., and Jeffrey A. Martin of Grant Thornton LLP provide a comprehensive overview of the tax impacts of restricted stock on both employers and employees.