Taxation and Funding of Nonqualified Deferred Compensation (ePub)

There are a variety of problems that can be addressed by nonqualified deferred compensation ("NQDC") arrangements. NQDC is essentially a compensation arrangement that provides for the payment of cash, property or benefits and does not come within one of the categories of deferred compensation arrangements which are "qualified" under applicable tax statutes.

This updated and expanded edition of Taxation and Funding of Nonqualified Deferred Compensation is a complete and current resource for using this extremely flexible planning device to best address your client's financial goals. Written by specialists in the field, this book defines the perspective of both the employee and employer in using this planning tool. The authors demonstrate how NQDC can provide solutions to complex compensation issues and provide up-to-date information on:

• The ways that NQDC can be tailored to serve the needs of employers and employees, and the tax consequences for each


• Differences in the timing of NQDC benefits under income tax and FICA rules


• How NQDC arrangements can be structured to comply with Section 409A


• Opportunities to minimize potential estate and income taxes on death benefits paid under NQDC


• How Section 457 of the IRC is applicable to NQDC arrangements for tax-exempt organizations and the unique burdens this puts on state and tax-exempt employers and their employees


• How NQDC impacts social security benefits, and when the risk of forfeiture should be structured to lapse in order to avoid substantial reductions in these payments


• Using NQDC with other plans, including split-dollar and 401(k) wrap plans


• Issues with financial accounting and securities laws, and more