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Section 409A Executive 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 -

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

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

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

House of Representatives Releases First Draft of Tax Reform Bill

by Jones Day on

The Situation: On November 2, 2017, the House Ways and Means Committee released its first draft of much-anticipated comprehensive U.S. tax reform legislation as the "Tax Cuts and Jobs Act." Chairman Brady’s markup of the bill...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

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

2016 End of Year Plan Sponsor “To Do” List (Part 1) Executive Compensation

by Snell & Wilmer on

As 2016 comes to an end, we are pleased to present you with our traditional End of Year Plan Sponsor “To Do” Lists. Like last year, we are presenting our “To Do” Lists in three separate Employee Benefits Updates. Part 1 of...more

Top 10 rules for compliant non-qualified deferred compensation

by Thompson Coburn LLP on

By Lori Jones Internal Revenue Code Section 409A regulates nonqualified deferred compensation (NQDC) plans and arrangements, which are commonly used to provide supplemental compensation to key executives. Complying with...more

Good News! New 409A Regulations (Yes, Really!) – Part 4: Getting Paid

by Bryan Cave on

On the TV show Futurama, the aged proprietor of the delivery company Planet Express, Professor Hubert J. Farnsworth, had a habit of entering a room where the other characters were gathered and sharing his trademark line,...more

Proposed Section 409A Regulations Would Clarify Separation from Service Analysis in Connection with Change in Status From Employee...

by Proskauer - Tax Talks on

Pursuant to the final regulations under Section 409A of the Internal Revenue Code of 1986, as amended, a termination of employment generally occurs at such time as the employer and employee reasonably anticipate that the...more

Employee Benefits Advisory: New Proposed 409A Regulations May Impact Nonqualified Deferred Compensation Arrangements

by Sherman & Howard L.L.C. on

On June 21, 2016, the IRS issued proposed 409A regulations intended to (a) clarify certain provisions of the final 409A regulations that were published in 2008, (b) withdraw and replace provisions in those earlier regulations...more

"Executive Compensation and Benefits Alert: IRS Issues New Section 409A Guidance"

In an unexpected development, on June 21, 2016, the IRS issued proposed regulations that clarify and modify the final regulations issued in 2007 and the proposed income inclusion regulations issued in 2008. In many cases,...more

Modifications to Code Section 409A Regulations

by Bracewell LLP on

On June 22, 2016, the Internal Revenue Service published proposed regulations under Internal Revenue Code Section 409A, which applies to non-qualified deferred compensation plans and arrangements. The proposed regulations are...more

2015 End of Year Plan Sponsor “To Do” List (Part 3) Executive Compensation

by Snell & Wilmer on

As 2015 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 Employee Benefits Updates....more

Corporate Communicator - Fall 2015: SEC Proposes Rules for the Clawback of Executive Compensation

by Snell & Wilmer on

In this issue of the Corporate Communicator, we bring you an article about the SEC’s recently released proposal to adopt rules for the clawback of executive compensation. The proposal is already controversial and it may prove...more

IRS Limits Correction Opportunities under Section 409A Proposed Income Inclusion Regulations and Imposes 20% Penalty

In Chief Counsel Advice 201518013 (May 1, 2015) (the "CCA"), the IRS addresses an executive retention bonus that originally vested after three years and was payable in equal installments on the first two anniversaries of the...more

IRS Rules Retention Arrangement Violates 409A

by McGuireWoods LLP on

In a Chief Counsel Memorandum issued last month, the IRS concluded that an executive retention arrangement violated Section 409A despite the employer’s efforts to correct the arrangement before the retention bonus vested....more

Chief Counsel Memorandum Clarifies IRS Position on Informal 409A Corrections

by 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

Does Your Retention Bonus Plan Violate IRS Code?

by Miller & Martin PLLC on

In a memorandum released earlier this month, the IRS Office of Chief Counsel ruled that a retention bonus payable to an executive violated Section 409A of the Internal Revenue Code ("409A"). The IRS further ruled that the...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

by Shearman & Sterling LLP on

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

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