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Deferred Compensation › Internal Revenue Service › Employer Liability Issues

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 -
Verrill

Section 457(f) Plans and Noncompete Clauses: What the IRS Gave, the FTC May Take Away

Verrill on

When the IRS published proposed regulations harmonizing key provisions of Code Sections 409A and 457(f) in 2016, executive compensation lawyers and consultants rejoiced. It was not just that a long wait was over (roughly nine...more

Verrill

Why Is There No IRS Correction Program for Non-Governmental 457(b) Plans?

Verrill on

This post examines excess deferrals under non-governmental 457(b) plans, including the approved method for correcting them and the penalty for failing to correct them, to make the case for a change in IRS policy on correcting...more

Verrill

Nonqualified Deferred Compensation and the Special Timing Rule HR Professionals Should Be Aware of for FICA Tax Purposes

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Twenty years ago this month the Enron Corporation imploded in spectacular fashion and declared bankruptcy. In the weeks leading up to its bankruptcy filing, over 100 highly compensated employees raced to receive early...more

Foley & Lardner LLP

Deferred Compensation Plans and FICA Taxes: A Valentine’s Day Match or Disaster?

Foley & Lardner LLP on

While February is usually the month for valentines and candy conversation hearts, I hope you will use this month to give a little love and attention to one of the often overlooked “other” taxes applied to payments from...more

Foley & Lardner LLP

How Do I Report Non-Qualified Plan or Severance Payments to a Former Employee? Hint: You Should Probably Use a W-2, Not a 1099!

Foley & Lardner LLP on

Employers commonly make payments to former employees for a number of reasons. Two of the more routine payments are those from a non-qualified deferred compensation plan (such as payments from a supplemental executive...more

Ward and Smith, P.A.

Timing is Everything: IRS Raises the Stakes for Employers Who Delay FICA Taxation of Deferred Compensation

Ward and Smith, P.A. on

Employers, both for-profit and tax-exempt organizations, often overlook the complex FICA tax rules applicable to deferred compensation. Unfortunately, this oversight now can be a real problem for the employer. When an...more

Sullivan & Worcester

FICA Taxes and Administrative Traps for Employers

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The nuances of the Social Security and Medicare tax system – collectively FICA taxes – continue to confound and increase the potential liability of employers who are not well versed in this area....more

Parker Poe Adams & Bernstein LLP

Deferred Compensation - Updated IRS Audit Guide

Parker Poe Adams & Bernstein LLP on

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

Snell & Wilmer

Chief Counsel Memorandum Clarifies IRS Position on Informal 409A Corrections

Snell & Wilmer on

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

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