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Apr 8, 2024 · A non-qualified deferred compensation (NQDC) plan allows a service provider (e.g., an employee) to earn wages, bonuses, or other compensation in one year but receive the earnings—and defer...
Nov 28, 2023 · A 409A plan is a non-qualified deferred compensation plan for compensation that has been earned but not received. It can be a tax-saving strategy for high earners.
Unlike FICA, the self-employment tax rules do not have a special timing rule for deferred compensation amounts. Such amounts are only taxable for SECA when paid or otherwise includable in income (e.g., a 409A violation). A NQDC plan sponsor does, however, have responsibility to report payments of deferred compensation to its independent ...
Jan 2, 2024 · NQDC plans (sometimes known as deferred compensation programs, or DCPs, or elective deferral programs, or EDPs) allow executives to defer a much larger portion of their compensation and to defer taxes on the money until the deferral is paid.
Oct 1, 2020 · To curtail this abuse, Sec. 409A places restrictions on the deferral of compensation under nonqualified deferred compensation plans (including underlying agreements or any other arrangement providing nonqualified deferrals), subject to some exceptions and exclusions.
Sep 12, 2021 · Under a NQDC plan, employers can only deduct the benefit as the employee includes the benefit in taxable income. The deduction amount is the total amount included in the employee’s taxable compensation, which includes any earnings on the employer contributions.
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Sep 21, 2020 · Under IRC Section 409A, deferred compensation is includable in an employee’s taxable income when the amount is paid (or becomes available) to the employee. As with other compensation, employers report the distributed amount as taxable compensation.
