In a previous post, we summarized a new Financial Accounting Standards Board (FASB) rule that allows increased share withholding for taxes under United States Generally Accepted Accounting Principles (GAAP). This new rule permits cash settlement of a share-based award for tax withholding up to the maximum statutory tax rate in the applicable jurisdiction without causing adverse accounting treatment of the equity award.

The rule generally became effective for calendar year companies on January 1, 2017. Many companies are now considering implementing increased share withholding for taxes and must consider their existing equity plan provisions and securities law, IRS, and payroll issues. READ MORE