News & Analysis as of

Section 409A Deferred Compensation

Section 409A is a section of the United States Internal Revenue Code enacted in 2004 as part of the American Jobs Creation Act and applies to compensation that a worker earns in one year, but that is paid in a... more +
Section 409A is a section of the United States Internal Revenue Code enacted in 2004 as part of the American Jobs Creation Act and applies to compensation that a worker earns in one year, but that is paid in a future year. If deferred compensation meets the requirements of Section 409A, then the earner's tax liability is the same as it would be for other types of compensation. If deferred compensation does not meet the requirements of Section 409A, then the earner is subject to certain additional taxes.  less -

Tax Reform Could Cost Tax Exempt Entities

by Poyner Spruill LLP on

Under the recently enacted tax reform act (Tax Cuts and Jobs Act), tax-exempt organizations may be required to pay a 21 percent excise tax on certain compensation and certain separation pay. The new excise tax applies...more

The New Tax Rules for Executive Compensation and Employee Benefits

by McGuireWoods LLP on

On Dec. 22, President Trump signed into law the 2017 Tax Act, the most comprehensive set of changes to the Internal Revenue Code since 1986. Some of the changes affect executive compensation and employee benefits. Because...more

IRS Issues Limited Section 409A Relief to Pay Income Taxes on Pre-2009 Section 457A Deferrals

by Proskauer - Tax Talks on

The Internal Revenue Service (the “IRS”) has issued Notice 2017-75 (the “Notice”), which provides certain limited relief from the strict requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the...more

To Accelerate or Not? Potential Tax Planning in Light of Proposed Reforms to Code Section 162(m)

by Proskauer - Tax Talks on

Under both the House and Senate versions of the Tax Cuts and Jobs Act, Internal Revenue Code Section 162(m) would be modified to expand the scope of companies and executive officers subject to the limitation on deductibility...more

Federal Tax Reform Bill Makes Significant Changes Related to Executive Compensation

by Davis Wright Tremaine LLP on

On November 16, the House of Representatives passed its version of the Tax Cuts and Jobs Act, and the Senate passed its version of the bill on December 2. Although the House and Senate must first reconcile their respective...more

Update: Executive Compensation Ramifications of Proposed Tax Cuts and Jobs Act

by Latham & Watkins LLP on

Proposed tax reform legislation includes several provisions that will affect the treatment of executive compensation. Key Points: ..The current House and Senate bills remove the previously proposed Section 409B1 and...more

Proposed Tax Reform Bills of Senate and House Now Aligned on Key Compensation and Benefits-Related Tax Provisions

This WSGR Alert provides a high-level comparison of the latest tax reform proposals from the U.S. House of Representatives and the U.S. Senate as they relate to compensation and benefits matters....more

2017 End of Year Plan Sponsor “To Do” List (Part 3) Executive Compensation

by Snell & Wilmer on

As 2017 comes to an end, we are happy to present our traditional End of Year Plan Sponsor “To Do” Lists. This year, we are publishing our “To Do” Lists in four separate Employee Benefits Updates. Part 1 covered year-end...more

Thanksgiving Tax Frenzy – New Tax Bill Proposes Executive Compensation Changes That Could Derail Deferred Compensation and Stock...

Congress has been in a frenzy to try and get new tax legislation passed by Thanksgiving, and members of the House and Senate would presumably rather be enjoying a feast rather than drafting and analyzing additional tax...more

Tax Planning Under the Tax Cuts and Jobs Act: Flow-Throughs Are the Answer to Everything

by Proskauer - Tax Talks on

The tax reform bills introduced in the House of Representatives and the Senate dramatically reduce the corporate tax rate from 35% to 20% and create added incentives for taxpayers to invest capital into U.S. businesses with...more

Proposed Senate Bill Revives Concern of Adverse Impact on Equity and Performance-Based Compensation

by Fenwick & West LLP on

The Joint Committee on Taxation released a description of the Senate Chairman’s Mark to the proposed Tax Cuts and Jobs Act on November 9, 2017, reintroducing adverse equity and performance-based compensation tax provisions...more

House Bill Proposes Major Modifications To Employee Compensation And Benefits-Related Laws; Initial Amendments Provide Limited...

by Katten Muchin Rosenman LLP on

The Tax Cuts and Jobs Act proposed by the US House of Representatives on November 2 (House Bill) proposes major modifications to employee and partner compensation and benefits-related provisions of the Internal Revenue Code,...more

House Ways and Means Committee Says, “Never Mind” to Repeal and Replace of Code Section 409A

One week ago the Republicans’ Tax Bill H.R. 1, the “Tax Relief and Jobs Act,” was released. Section 3801 of that bill proposed to significantly curtail deferred compensation arrangements by replacing Internal Revenue Code...more

Code Section 409A…Here Today but Possibly Gone Tomorrow and Other Proposed Changes in the Tax Cuts and Jobs Act

by Bryan Cave on

Last week the House unveiled its tax overhaul plan, the Tax Cuts and Jobs Act (“Act”). The Act’s proposals related to employee benefits and compensation are as follows...more

New Draft Tax Bill Provisions Have the Potential to Dramatically Alter Executive Compensation

by Hogan Lovells on

The new draft tax bill, unveiled last week by the Trump administration has many provisions which would significantly affect many businesses in the United States. This post does not focus on all of the implications for the...more

Episode 26: Talking Tax Reform and Executive Comp

by Akerman LLP on

Don’t let the episode title scare you away! Matt welcomes colleague Leanne Reagan to discuss how the House’s proposed tax reform bill impacts compensation arrangements and how, if passed into law, it could completely...more

UPDATE: Three Significant Takeaways from the Tax Cuts and Jobs Act

by Polsinelli on

This update to our Tax Alert on Nov. 2nd describes additional key provisions in the “Tax Cuts and Jobs Act” (H.R. 1), released by the Chairman of the House Ways and Means Committee on Nov. 2nd, as well as the Chairman’s...more

Tax Reform Guts Executive Compensation Benefits

by Akerman LLP on

On November 2, 2017, United States Representative Kevin Brady (R-TX), Chairman of the Ways and Means Committee, introduced the Tax Cuts and Jobs Act (the Act), the Trump Administration’s much-heralded tax reform effort. In...more

Tracking the Tax Cuts and Jobs Act: Compensation and Benefits Provisions

by Locke Lord LLP on

On November 2, 2017, the House Republicans released the text of the Tax Cuts and Jobs Act (the “House Bill”), laying out a broad set of changes to the tax code that could dramatically change the ways companies compensate,...more

Major Impact on Employee Benefits

by McGuireWoods LLP on

The House GOP tax reform bill introduced Nov. 2, 2017, would have a major impact on employee benefits, including executive compensation, qualified retirement plans, fringe benefits and tax-exempt organizations. If adopted,...more

Tax Bill Compensation Changes – A Cause for Concern

The tax bill issued yesterday contains a number of provisions that, if implemented, will result in dramatic changes to the taxation of certain compensation arrangements. ...more

Reminder that Nonqualified Deferred Compensation Deferral Elections for 2018 Must be Made on or Before December 31, 2017

by Snell & Wilmer on

As we approach the end of 2017, we want to remind employers and employees to take action before year end if they desire to defer compensation that will be earned during 2018...more

Tips for Drafting Executive Employment Agreements – Tip #4 – Beware of 409A

by Bryan Cave on

This article continues with another tip for drafting executive employment agreements and the importance of consulting counsel. For every well drafted executive employment agreement in the business world, there seem to be...more

DSU Plans Require Careful Review to Avoid Adverse U.S. Tax Treatment

by Dorsey & Whitney LLP on

A Canadian company is planning to adopt a deferred share unit plan (DSU plan) for its directors. Only one or two of its directors are U.S. citizens or U.S. residents (“U.S. Directors”). With only one or two U.S. Directors,...more

Focus on Tax Strategies & Developments - December 2016

by McDermott Will & Emery on

Significant Changes in US Tax System Likely - In the short time since the surprising election of Donald J. Trump as the 45th president of the United States, much already has been written about the likelihood and likely...more

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