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Deferred Compensation › Internal Revenue Service

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 -
Bricker Graydon LLP

Do I Need a 409A Valuation for my Company?

Bricker Graydon LLP on

If you have equity as part of your retirement or executive compensation plans, you likely need a 409A valuation. The need for a valuation also applies if you are preparing to issue equity (equity grants or stock options) or...more

The Wagner Law Group

IRS Issues Final Regulations on Non-U.S. Tax Withholding Under Deferred Compensation Plans, IRAs and Commercial Annuities

The Wagner Law Group on

The Internal Revenue Service (“IRS”) and the Treasury Department on October 21, 2024, issued final regulations under Sections 3405(a) and 3405(b) of the Internal Revenue Code of 1986, as amended (“Code”). (The IRS had issued...more

Carlton Fields

IRS Clarifies Application of Required Minimum Distribution Rules to Inherited Retirement Accounts

Carlton Fields on

The Secure Act, passed in 2019 and updated in 2022, made significant changes to the required minimum distribution (RMD) rules applicable to qualified retirement plans, IRAs, 403(b) plans, and other eligible deferred...more

Williams Mullen

Annual Employee Benefits Compliance Checklists - Corporate Counsel

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The following checklist highlights key issues for corporate counsel with respect to employee benefit plans and executive compensation arrangements....more

McDermott Will & Emery

Weekly IRS Roundup November 4 – November 8, 2024

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Check out our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of November 4, 2024 – November 8, 2024...more

Davis Wright Tremaine LLP

IRS Releases 2025 Cost-of-Living Adjusted Limits for Benefit Plans

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The Internal Revenue Service recently announced 2025 dollar limits for qualified retirement plans (including 401(k) plans), deferred compensation plans, and health and welfare plans. Adjustments to certain limits are based on...more

Morgan Lewis - ML Benefits

Double Taxation, IRS Audits of Deferred Compensation Payments May Arise from IRS Instructions for 2023 Forms W-2,1040

Morgan Lewis - ML Benefits on

Companies required to use “box 11” of Form W-2 in 2023 to report either payments of nonqualified deferred compensation (deferred compensation) or FICA taxation of unpaid deferred compensation may soon be challenged by...more

Lowenstein Sandler LLP

Puttin’ on Your Top Hat: How to Effectively Structure a Deferred Compensation Plan as a “Top Hat” Plan

Lowenstein Sandler LLP on

“Top hat plans” —non-qualified deferred compensation plans that can be exempt from most of the requirements of Employee Retirement Income Security Act of 1974 or ERISA—can be a useful tool for employers looking to provide...more

Farella Braun + Martel LLP

The IRS Is Targeting Partnership Transactions: Is Your Representative Ready?

Farella Braun + Martel LLP on

Earlier this week, Treasury and the IRS issued guidance to halt the use of partnership rules in the Internal Revenue Code to engage in abusive basis-shifting transactions whereby tax basis is stripped from certain assets and...more

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

Lowenstein Sandler LLP

Deferred Compensation: A Primer on Section 409A of the Code and Why it Matters

Lowenstein Sandler LLP on

On this episode of “Just Compensation,” the hosts provide an introduction into Section 409A, the complicated tax code provision that governs non-qualified deferred compensation: when does it apply, how do you comply with it,...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

Whiteford

Client Alert: Update: How "Profits Interest" Works And Why Knowing That Can Matter A Whole Lot

Whiteford on

In many ways, the labor market is as competitive as ever. Businesses continue to explore compensation packages, in addition to ordinary salary, that will help them attract, hire and retain talent. One method of compensation...more

Foley & Lardner LLP

To 457(b) or Not to 457(b): Five Rules You Must Follow to Keep Your 457(b) Plan Compliant

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Recruiting and retaining top executives can be challenging for non-governmental tax-exempt organizations such as Code §501(c)(3) organizations, private universities, and certain healthcare organizations (Nonprofits). Not only...more

Dorsey & Whitney LLP

The Special Timing Rule for Taxation of Nonqualified Deferred Compensation

Dorsey & Whitney LLP on

For an employee who is a U.S. taxpayer, both the employer and the employee are liable for a portion of Social Security taxes and Medicare taxes (collectively referred to as “FICA” taxes) on the employee’s compensation. ...more

Rivkin Radler LLP

The Family Business – Compensating Family-Employees

Rivkin Radler LLP on

Hope you had a good Thanksgiving Holiday. Some of us probably feel we ate or drank either too much or not enough, watched too much or not enough football, or spent too much time discussing politics and the state of the...more

Dorsey & Whitney LLP

Canadian Compensation Arrangements - When Do I Need U.S. Counsel?

Dorsey & Whitney LLP on

Imagine a Canadian company adopts a deferred share unit plan (DSU Plan) for its directors.  At the time the plan is adopted, the company does not have the plan reviewed by U.S. counsel, because none of their directors reside...more

Davis Wright Tremaine LLP

IRS Releases 2024 Cost-of-Living Adjusted Limits for Benefit Plans

Davis Wright Tremaine LLP on

The Internal Revenue Service recently announced 2024 dollar limits for qualified retirement plans (including 401(k) plans), deferred compensation plans, and health and welfare plans. Adjustments to certain limits are based on...more

Levenfeld Pearlstein, LLC

Are Partner Retirement or Withdrawal Provisions in Governing Documents Subject to Section 409A of the Internal Revenue Code?

Levenfeld Pearlstein, LLC on

As part of our ongoing series on tax issues for accounting firms, this article provides information on retirement or deferred compensation arrangements, the related rules of Section 409A of the Internal Revenue Code, and how...more

Williams Mullen

Hoops, LP: Seventh Circuit Denies Deferred Compensation Deduction in Taxable Asset Sale - Upsetting Common Understanding of Timing...

Williams Mullen on

On August 9, 2023, the Seventh Circuit Court of Appeals in Hoops, LP and Heisley Member, Inc., Tax Matters Partner vs. Commissioner of Internal Revenue, affirmed the Tax Court’s 2022 decision denying a deduction to a plan...more

Lowenstein Sandler LLP

“In-the-Money” or Discounted Stock Options: The Pros, Cons, and How to Avoid 409A Violations

Lowenstein Sandler LLP on

In this episode, the hosts discuss how companies can structure “in-the-money” stock options in order to avoid violating IRS rules governing non-qualified deferred compensation. They also address the benefits and potential...more

Harris Beach Murtha PLLC

Retirement Accounts: Much Needed Clarity Regarding the 10-Year Rule

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Americans hold a considerable percentage of their wealth in retirement accounts. Recent changes to the Internal Revenue Code (the “Code”), as well as proposed regulations, have introduced new rules altering the required...more

Verrill

The How and When of Separations from Service Under Section 409A

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Readers who regularly work with deferred compensation plans will know that Section 409A of the Internal Revenue Code (“Section 409A”) prescribes six events or times at which deferred compensation may be distributed to...more

Groom Law Group, Chartered

Administration Budget Proposals Tighten Rules for 409A Violations, VEBA Funding and Indemnity Health Plans

Groom Law Group, Chartered on

On March 28, the Biden Administration submitted its Fiscal Year 2023 budget proposals reflecting its budget and tax policy priorities, which could surface when Congress resumes work on budget reconciliation. While it is...more

Rivkin Radler LLP

Tax Court’s Decision On Assumption of Liability in M&A – A Clean Block or Goaltending?

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Assumed Liabilities- If a taxpayer were to sell the assets that comprise the taxpayer’s business, they would realize gain if the amount realized by the taxpayer from the sale is more than the taxpayer’s adjusted basis for...more

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