The SHARE Plan Act provides tax incentives to encourage large corporations to distribute company stock to their employees. Companies with at least 500 U.S. employees that establish an employee stock-sharing plan can reduce their federal corporate income tax rate by 3 percentage points, provided the plan meets specific requirements including distributing stock equally to at least 80 percent of their lowest-paid employees and maintaining a stock distribution ratio of at least 5 percent. The bill also exempts employees from paying taxes on the value of stock they receive through these company plans. To qualify, companies must be U.S.-based, include stock grants of at least 1 percent of outstanding shares annually, and allow employees to vest in their shares within five years or immediately upon retirement or termination. The law takes effect more than one year after enactment, giving companies time to establish compliant programs before gaining the tax benefits.
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