The IRS recently issued final regulations for implementation of Section 409A of the Internal Revenue Code. Section 409A regulates deferred compensation. Deferredtraditionally have been viewed as compensation reserved for executives and upper level employees. But the effects of Section 409A extend much further.
Now is the time to familiarize yourself with the regulations. The IRS has set Dec. 31, 2008, as the deadline to get plans into compliance.
Q: What is Section 409A and what does it do?
A: Section 409A establishes comprehensive rules for taxation of deferred compensation and places specific limitations on plans, programs, agreements and other arrangements through which such compensation is paid. In particular, it expansively defines “deferred compensation,” imposes severe penalties for noncompliance and prescribes strict payment rules affecting the timing of deferred elections and t...(register to read more)