The House Ways and Means Committee unanimously approved bills on Wednesday that were introduced by U.S. Reps. Erik Paulsen (R-MN) and Bob Dold (R-IL).
Paulsen’s Empowering Employees through Stock Ownership Act, H.R. 5719, would rethink the tax treatment of restricted stock that is issued to employees to promote employee ownership of startups.
“This bipartisan legislation will accomplish two simple — but very important — goals: Keep America on the forefront of innovation and promote employee ownership at startup small businesses,” Paulsen said. “Helping startups attract talent is an essential component of encouraging innovation and entrepreneurship, as well as inventing the next big idea or developing a life-changing technology.”
Under current law, employees accepting stock options or equity interest in a startup must pay taxes on them immediately. That can prevent employees with limited resources from exercising those options.
Paulsen’s bill would allow employees to defer taxes on stock options until they have more resources to meet tax obligations.
Dold’s bill, the United States Appreciation for Olympians and Paralympians Act, H.R. 5946, would reform the tax treatment of medals and other prizes awarded to Team USA athletes.
“Team USA athletes train for years to have a chance to compete in the Olympic and Paralympic games,” U.S. Rep. Kevin Brady (R-TX), the chairman of the committee, said. “This comes at a great personal sacrifice and – often times – a significant family expense. Yet, after these athletes excel in their sport and bring home a medal, the IRS welcomes them home with a tax bill. Congressman Dold’s legislation would change this and ensure that Team USA athletes will never face a larger tax burden for winning Olympic and Paralympic medals.”