Employee Benefits Law Report

Tag Archives: bonus

IRS Limits Ability to Deduct Annual Bonus Payments in the Year of Accrual, Rather Than the Year Paid

Are you able to accrue and deduct annual bonuses for a 2013 calendar year performance period in 2013, so long as you pay the bonuses to your employees by March 15, 2014? If this question sounds familiar, it is because we have blogged about past efforts of the IRS to address this issue. Historically, most employers believed that the answer was they could deduct the bonuses in the year accrued rather than the year paid, but during the past few years, the IRS has chipped away at that belief. In a recent Chief Counsel Advice Memorandum, the IRS issued its most sweeping guidance to date on the issue.… Continue Reading