The New Tax Law and ESOPs: How Tax Reform Is Changing ESOPs

The 2017 Tax Cuts and Jobs Act affects ESOPs in a variety of ways. The law created: A permanent reduction of the federal corporate income tax rate A permanent limitation on deductibility of business interest expense A temporary limitation on deductibility of state and local taxes A temporary “bonus depreciation” of “qualified property" A temporary deduction of 20% of “Qualified Business Income” for nonservice pass-through entities