Deferred Compensation

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... 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.  less -
News & Analysis as of

Deferred Compensation - Updated IRS Audit Guide

The IRS recently updated the Audit Techniques Guide that is provided to its agents with respect to deferred compensation programs, including - as the Guide specifies - salary reduction arrangements, bonus deferral plans,...more

Davidson v. Henkel — What’s Going On With Nonqualified Deferred Compensation Plans and FICA

In This Presentation: - Davidson v. Henkel Corp. - The Parties - NQ Plan - The Plan’s Tax Clauses - Davidson’s Pre-Retirement Counseling - 2011 Compliance Review and Letter - Henkel’s Tax...more

Two key legislative developments impact wellness plans, non-qualified deferred compensation plans

Employer-sponsored “wellness programs” have been a growing trend for years. Many employers have established having some form of such a program to help employees become more aware of their physical well-being. The idea of an...more

Chief Counsel Memorandum Clarifies IRS Position on Informal 409A Corrections

On May 1, the IRS released a Chief Counsel Memorandum that clarifies the IRS’ position with respect to the correction of deferred compensation arrangements outside of the IRS’ formal Section 409A correction programs....more

IRS Chief Counsel Memorandum Clarifies that Correction of Section 409A Failures in Year of Vesting Will Not Shield Income...

Earlier this month, the Office of Chief Counsel of the Internal Revenue Service released a Memorandum clarifying the impact of a correction of a Code Section 409A operational failure before the date of vesting of nonqualified...more

The Importance of Fixing Section 409A Compliance Failures Sooner Rather Than Later

A recent Memorandum issued by the Office of Chief Counsel within the Internal Revenue Service demonstrates yet again the perils of failing to comply with Section 409A of the Internal Revenue Code. The Memorandum takes the...more

Congressional Report Takes Aim At Nonqualified Deferred Compensation

A recent report from ranking member Sen. Ron Wyden and the Democratic staff on the Senate Finance Committee indicates that nonqualified deferred compensation plans continue to be in the crosshairs of potential tax reform...more

Companies Should Monitor Deferred Compensation Arrangements For Section 409A Compliance Purposes

Given the complexity of the rules under Section 409A of the Internal Revenue Code, which govern the timing and taxation of payments made under non-qualified deferred compensation arrangements (NDCAs), companies are encouraged...more

Don’t Miss Short-Term Deferral Day

Section 409A, the provision of the Internal Revenue Code that regulates the time and form of payment of nonqualified deferred compensation, contains a helpful exception for “short-term deferrals.”...more

Employers: Properly Administer Nonqualified Deferred Compensation Plans, or You May Be Held Liable to Participants for Adverse Tax...

An employer’s liability to retirees for “improper” FICA tax withholding illustrates the importance of diligent administration of nonqualified deferred compensation plans. In the recent case of Davidson v. Henkel Corp.,...more

Employer Liable For Reduced Value of Deferred Compensation Benefits Due to Failure to Properly Withhold FICA Taxes

A federal district court recently ruled that an employer who failed to timely withhold Social Security and Medicare taxes (FICA taxes) on nonqualified deferred compensation (NQDC) in accordance with the special timing rule...more

Employers Can Be Responsible for FICA Withholding Errors

Back in 2013 I blogged about a class action lawsuit brought against Henkel Corporation for improper Social Security (FICA) tax withholding from nonqualified deferred compensation benefits. I am blogging now on an update to...more

Executive Compensation – It May be Limiting Your Choices

Many community banks have been under fire recently. Added regulatory burdens, additional disclosure responsibilities, cleaning up bad loans, streamlining the organization, staying ahead of cybersecurity threats, and, perhaps...more

Want to get paid like Darryl Strawberry?

The IRS is auctioning off a deferred compensation arrangement Darryl Strawberry had with the Mets. Minimum bid is $550,000 for a payment stream that is estimated to be well over $1 million. Get your bid in by January 20th...more

Deferral Elections for 2015 Compensation

As reported in Part 3 of our 2014 End of Year Plan Sponsor “To Do” List, employers that sponsor deferred compensation programs should take action to ensure that deferral elections that apply to compensation that will be...more

Year-End Employment Tax Update– Complying With the Special Timing Rule for Nonqualified Deferred Compensation

Under a special timing rule contained in the federal tax regulations, benefits earned under many nonqualified deferred compensation arrangements are subject to Social Security and Medicare employment taxes (FICA taxes) as of...more

2014 End of Year Plan Sponsor “To Do” List (Part 3) Executive Compensation

As 2014 comes to an end, we are pleased to present you with our traditional End of Year Plan Sponsor “To Do” Lists. This year we are presenting our “To Do” Lists in three separate SW Benefits Updates. Part 1 of the series...more

Tax Court Characterizes Technology Executive’s Merger Proceeds as Ordinary Income

On October 30th, the U.S. Tax Court ruled that a key executive of a technology company acquired by Google for $93 million was required to report a large portion of his merger consideration as ordinary compensation income....more

IRS Announces Employee Benefit Plan Limits for 2015

Recently the Internal Revenue Service (IRS) and the Social Security Administration announced the cost-of-living adjustments to the applicable dollar limits on various employer-sponsored retirement and welfare plans and the...more

Bridging the Week - October 2014 #4

Senior Fed Officials Encourage Financial Industry Firms to Improve Compliance Culture - Enhancing culture was the theme at a workshop on “Reforming Culture and Behavior in the Financial Services Industry” held at the...more

IRS Announces 2015 Cost-of-Living Increases in Dollar Limits for Retirement Plans

On October 23, 2014, the IRS announced the 2015 cost-of-living increases applicable to the dollar limits for retirement plans. The annual limit for elective deferrals to 401(k) and 403(b) plans will increase from $17,500 to...more

2015 Retirement Plan Contribution Limits - Revised

On October 23, 2014, the Internal Revenue Service announced the 2015 cost-of-living adjustments to the contribution limits and other amounts applicable to various retirement plans. Those amounts are set forth below. Please...more

IRS Announces 2015 Dollar Limits for Employee Benefit Plans

The IRS has announced the new dollar limits for contributions and benefits in retirement and certain deferred compensation plans for 2015. The new limits are the result of the application of statutory cost-of-living...more

Alert: IRS Announces Adjusted Plan Limits for 2015

Adjusted Limits - The Internal Revenue Service has announced the 2015 limits that affect the operation of tax-qualified retirement plans, including 401(k) plans, and certain other types of employee benefit plans,...more

2015 Cost-of-Living Adjustments for Retirement and Other Benefit Plans

Retirement Plan Limits - The following limits apply to retirement plans in 2015: - The limit on elective deferrals under 401(k) and 403(b) plans has increased to $18,000 in 2015. - The annual limit on...more

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