Recent legislation supporting employee ownership has successfully passed in the Pennsylvania House and is on to the Senate. This Bill would amend State tax rules to allow the deferral of taxation on a lump sum distribution from the Employee Stock Ownership Plan (ESOP) of a company when the proceeds are reinvested in qualified replacement securities.
Pennsylvania is one of only a few States that do not currently mirror federal guidelines related to the “Internal Revenue Code Section 1042 election” regarding the treatment of certain types of income. If passed, this new legislation should provide additional incentive to selling shareholders to transition their business to employee ownership.
Read more in this blog post from the National Center for Employee Ownership (NCEO)
Want to learn more about the benefits of an ESOP?
Register to attend the NCEO free webinar series, Who Should Own Your Business After You? The GYF Business Valuation team will be presenting, What’s Your Business Worth? on February 17th, 2022 at 2:00 pm EST as part of this program. REGISTER HERE
For additional ESOP resources and details on how we help companies and trustees, visit the GYF ESOP Services Webpage
Learn more about employee ownership:
- Pennsylvania Center for Employee Ownership (PaCEO)
- Pittsburgh Citywide Taskforce on Employee Ownership