Application of New Corporate Tax Rate to Fiscal Year Companies, Part II

By Samantha Nussbaum, Bindu M. Culas

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As we previously discussed, under the recently enacted Tax Cuts and Jobs Act, the new 21% corporate tax rate applies on a blended basis to fiscal year companies (i.e., companies whose taxable years do not end on December 31st).  The IRS has now issued guidance for how fiscal year companies can calculate the amount of federal income tax they owe.

IRS Notice 2018-38 provides examples to illustrate these calculations.  The accompanying IRS news release can be accessed here.


Portrait of Samantha Nussbaum, PrincipalSamantha Nussbaum
Principal

Samantha Nussbaum has consulted on behalf of public and private companies, compensation committees, and senior management on all aspects of executive compensation. Samantha’s consulting and legal background includes advising on executive compensation in the context of mergers and acquisitions, spin-offs, and initial public offerings; executive employment, severance, and change in control agreements; equity incentive plans; deferred compensation; and securities laws, including reporting and disclosure implications.


Portrait of Bindu M. Culas, PrincipalBindu M. Culas
Managing Director

Bindu Culas has over 15 years of experience advising clients on the US and international legal, tax and regulatory aspects of designing and structuring equity incentive programs, employment agreement, and severance and change-of control plans. Bindu has worked with both domestic and foreign publicly traded and privately held companies as well as pre-IPO companies.