SHARE Plan Act

The SHARE Plan Act would create a new category of corporation eligible for a reduced federal corporate tax rate if the company maintains a formal SHARE plan that distributes equity (stock) to employees. A corporation would qualify as a SHARE corporation if it meets size and participation criteria, including an employee base of 500+ US full-time workers and a plan that either distributes at least 1% of its outstanding common stock to employees or maintains a SHARE ratio of at least 5%. The plan must meet specific design rules (broad participation, vesting over up to five years, non-cash distributions, and liquidity opportunities) and there is a per-employee cap on stock distributions to ensure broad-based participation. The bill also provides that distributions under a SHARE plan are excluded from an employee’s gross income for tax purposes and that corporations taking the tax reduction can deduct the fair market value of stock distributed. A list of SHARE corporations would be publicly published, and special rules apply to controlled groups. The provisions would apply to tax years beginning more than one year after enactment. In short, if a corporation implements a compliant SHARE plan and meets the thresholds, it would pay a lower corporate tax rate and employees would receive tax-advantaged stock distributions.