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Tax Break Linked to Employee Profit Sharing

New rules could encourage larger companies to share profits with their employees. Businesses wanting to deduct executive pay for tax purposes may need to distribute a portion of profits to their workforce. This aims to give employees a stake in the company's success.
Key points
Large companies might lose a tax deduction for executive salaries if they don't share profits with employees.
Employees (with at least one year of service) could receive cash distributions based on company profits.
Distributions must be fair and amount to at least 5% of company net income, unless it jeopardizes the business.
article Official text account_balance Process page
Expired
Citizen Poll
No votes cast
Additional Information
Print number: 117_HR_1665
Sponsor: Rep. Watson Coleman, Bonnie [D-NJ-12]
Process start date: 2021-03-08
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Summarized by: gemini-2.5-flash-preview-04-17
Source data: api.congress.gov
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OFFICIAL LEGAL TITLE

Employee Profit-Sharing Encouragement Act of 2021

FREQUENTLY ASKED QUESTIONS

What is the official ID of this bill?

The official print number for this legislation is 117_HR_1665.

Which chamber initiated this legislation?

This legislation was initiated in the House of Representatives.

When did the legislative process begin?

The process officially started on 2021-03-08.

What are the main provisions?

Key points include:

  • Large companies might lose a tax deduction for executive salaries if they don't share profits with employees.
  • Employees (with at least one year of service) could receive cash distributions based on company profits.
  • Distributions must be fair and amount to at least 5% of company net income, unless it jeopardizes the business.
What is the specific legal status?

The current status is Expired.

Where can I read the full text of this legislation?

The full official text is available at: View full text

Who is the primary sponsor?

The primary sponsor is Rep. Watson Coleman, Bonnie [D-NJ-12].

What is the latest detailed status?

The latest detailed status is: Referred to the House Committee on Ways and Means.

Is this summary verified?

Yes. This content was analyzed by AI and verified by the Lustra Judge System on 2025-12-27.

CATEGORIES

Taxes Labor