Deferred Compensation is a financial arrangement whereby a portion of an employee's current wages are distributed at a later time, usually to delay tax liability. Deferred compensation often takes the form... more +
Deferred Compensation is a financial arrangement whereby a portion of an employee's current wages are distributed at a later time, usually to delay tax liability. Deferred compensation often takes the form of stock options or severance payments.
A taxpayer we will call John worked for a savings bank in New York that was acquired by Washington Mutual Bank. John participated in the New York bank’s supplemental executive retirement plan (SERP) and its deferred...more
A recent advisory opinion from the New York State Department of Taxation and Finance concludes that payments received by an individual nonresident of New York in settlement of his benefits under two nonqualified deferred...more
Stockbrokers and financial advisors going through a divorce often face non-routine issues due to the unique nature of their compensation. It is important for a financial advisor, and likewise, his or her spouse, to retain a...more
Sometimes you can just rejuvenate something without have to replace it. A nice new tie can breathe life into an older suit. Instead of new kitchen cabinets, resurfacing is an option. Sanding and staining can add luster to a...more
Executive Summary: ERISA “top hat” plan’s anti-alienation provision does not trump state garnishment laws.
A familiar feature of ERISA is its protection of a participant’s retirement savings from creditors; ERISA...more
If your company has been cavalier about Internal Revenue Code Section 409A, you should reconsider. In a recent opinion by the United States Court of Federal Claims, the IRS scored the first points – more than $5 million of...more
Court of Federal Claims agrees with the IRS position that section 409A applies to discounted stock options; holding is important for compensatory stock option grants.
On February 27, the U.S. Court of Federal Claims...more
My colleague Jeff Cairns blogged about a recent court case confirming the IRS’s position that discounted stock options can be considered noncompliant nonqualified deferred compensation arrangements under Section 409A of the...more
Originally published in State Bar of California Taxation Section 2013 Sacramento Delegation in February 0f 2013.
Executive Summary -
Under Internal Revenue Code Section 409A (“Section 409A”), all amounts deferred...more
On January 2 , 2013, President Obama signed the American Taxpayer Relief Act of 2012 (H.R. 8) (the “Relief Act”) into law. While the principal intention of the Relief Act was to avert the key elements of the “fiscal cliff” by...more
The Employee Benefits and Executive Compensation team at Polsinelli Shughart have analyzed the potential implications of the new Medicare Tax to their clients' businesses and can provide direct and practical advice on your...more
In This Edition:
- Year-end Deadline for Correcting Section 409A Deferred Compensation Arrangements That Condition Payment on an Employee Release or Covenant:
By December 31, 2012, all deferred compensation...more
The Internal Revenue Service has issued Proposed Regulations under Section 1411 of the Internal Revenue Code providing guidance on the 3.8% additional tax that will be imposed beginning January 1, 2013 on the “net investment...more
Like a number of states, New York requires nonresidents to pay income taxes on wages earned in the state. Those rules extend to an allocable portion of deferred compensation and gain from the exercise of stock options earned...more
This Alert is designed to offer easy to understand and easy to implement year-end tax strategies in times of incredible tax uncertainty. This Alert is also designed to stimulate thought and inspire action during one of the...more
It is standard practice that employment agreements condition payment of severance benefits or other separation compensation on the employee executing a general release of claims against the employer. However, unless...more
Severance agreements and employment contracts with release of claims provisions may violate 409A of the Internal Revenue Code. Bad release provisions may be fixed, penalty-free, before December 31, 2012.
The Treasury Department and the IRS have provided favorable transition relief for correcting arrangements that impermissibly condition the payment of nonqualified deferred compensation on a service provider's completion of...more
As the end of the year approaches, important transition relief from penalties and excise taxes imposed by Section 409A of the Internal Revenue Code (the Code) is about to expire. If an employer has an employment agreement or...more
Internal Revenue Code Section 409A governs deferred compensation, which includes, with some exceptions, practically all agreements or plans in which an agreement is made in one year to pay an amount in a later year. Its most...more
By December 31, 2012, all deferred compensation arrangements in which payment is contingent on employee action, such as execution of a release of claims, must either include payment-timing restrictions that comport to IRS...more
Ready, set, go! Following the Presidential election last night, the race is on for year-end tax planning and bracing for the fall off the fiscal cliff.
While no one can tell exactly what the tax outcome will be after...more
Employers with employment agreements, severance policies, and other non-qualified deferred compensation agreements that contain language conditioning any payment on employee action, such as the execution of a release of...more
Employment, change in control, and severance agreements, as well as severance and deferred compensation plans, often condition payment upon the execution of a release or a noncompete or other employment-related condition. Any...more
Employers with employment, severance or other compensation arrangements with their employees should be aware the IRS has taken the position agreements that provide for payments, such as severance payments, that will be made...more
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