This is referred to as nonqualified deferred compensation. An Internal Revenue Code Section 409A Primer By Tony Ling and Galen Mason1 The American Jobs Creation Act of was signed into law on October 22,.
Section 409A of the Internal Revenue Code regulates nonqualified deferred compensation paid by a " service recipient" to a " service provider" by generally imposing a 20% excise tax when certain design or operational rules contained in the section are violated. Service recipients are generally employers, but those who hire independent contractors are.
Section 409A applies to compensation that workers earn in one year but that is not paid until a future year. Section 409A lays out the rules for when nonqualified deferral elections can be made, and when distributions can be taken. தள்ளுபடி பங்கு விருப்பங்கள் 409a. Section 409A applies to all companies offering nonqualified deferred compensation plans to employees.
We are not attorneys, so we will leave the legal minutiae of that definition for others to grapple with, noting only that generally speaking, a deferred compensation plan is an arrangement whereby an employee ( “ service provider” in 409A parlance). Topic page for Section 409A Nonqualified Deferred Compensation Plans.