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Publications
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09.18.2013IRS Guidance on Same-Sex Marriage: Employee Benefit ConsiderationsUpdatesIn response to the Supreme Court decision in United States v. Windsor, 133 S. Ct. 2675 (2013), the Internal Revenue Service issued Revenue Ruling 2013-17 (Ruling) on August 29, 2013, in which the IRS set forth the following federal tax principles:
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02.16.2010Deadline Approaching for EGTRRA Restatement and IRS Determination Letter Filings for Prototype and Volume Submitter PlansUpdatesPrototype and volume submitter defined contribution plans (such as profit sharing, 401(k) and money purchase pension plans) must be amended and restated for the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA Restatement) and subsequent legislation and guidance by April 30, 2010. Employers who maintain a prototype or volume submitter defined contribution plan should have been contacted by their document provider who will provide the required restatement.
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10.21.2009Year 2010 IRS Dollar LimitsUpdatesThe IRS announced the Year 2010 cost-of-living adjustments for various provisions affecting employee benefit plans.
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07.16.2009Employers Must Act by the Last Day of the 2009 Plan Year to Amend Tax-Qualified Plans Pursuant to the Pension Protection Act of 2006UpdatesThe Pension Protection Act of 2006 made numerous changes to rules regarding employee benefit plans, including tax-qualified defined benefit and defined contribution plans. Although the changes took effect at various dates (and plans have been required to operationally comply with each change as of the specified effective date), amendments reflecting these changes generally do not have to be adopted until the last day of the plan's 2009 plan year.
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06.04.2008Important Reminder: Deadline Approaching for Amending Deferred Compensation Arrangements Under Section 409AUpdatesThe deadline is fast approaching for amending deferred compensation arrangements that are subject to Section 409A of the Internal Revenue Code.
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10.29.2007Expanded Deferred Compensation Relief: IRS Fully Extends Section 409A Documentation Deadline and Certain Transition Relief Through 2008, Delays Effective Date of Final Regulations and Provides W-2 and Other GuidanceUpdatesLast week the IRS issued Notice 2007-86, which delays until January 1, 2009 the deferred compensation final regulations of Internal Revenue Code Section 409A and generally provides expanded relief and guidance. The IRS also separately issued Notice 2007-89, which generally extends for the 2007 tax year prior IRS guidance to employers and other service providers regarding reporting and withholding obligations for annual deferrals of compensation and amounts includible in gross income due to Section 409A violations. This update summarizes key aspects of both notices and provides practical guidance.
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09.12.2007Limited Deferred Compensation Relief: IRS Partially Extends Section 409A Documentation Deadline and Provides Guidance — but Employers Must Still Take Some Actions by December 31, 2007UpdatesOn September 10, 2007, the IRS issued Notice 2007-78 providing limited relief and guidance for the deferred compensation tax rules of Internal Revenue Code Section 409A, including a limited extension until December 31, 2008 of the deadline to adopt documents that comply with Section 409A. This update summarizes the key aspects of the notice and offers practical tips for employers and other service recipients.
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04.16.2007Deferred No Longer! IRS Issues Section 409A Final Regulations Adding Generally Modest – but Helpful – ReliefUpdates
Last week the IRS issued the long-awaited final regulations under Section 409A of the Internal Revenue Code, which generally provides that amounts deferred under a "nonqualified deferred compensation plan" are currently includible in taxable income if not subject to a substantial risk of forfeiture, unless the plan meets specified design and operational requirements. Failure to comply with the applicable requirements of Section 409A can result in significant income tax consequences, including a 20% additional tax imposed on the employee or independent contractor.
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12.28.2005Valuing Private Company Stock for Compensation Purposes - Practical GuidanceUpdatesInternal Revenue Code Section 409A, along with recent changes in financial accounting rules, has significantly increased the focus of private companies on accurately valuing their common stock for purposes of granting options and other equity incentive awards. Section 409A has upped the ante by imposing severe tax consequences on individuals for certain stock-based compensation that does not comply with the new deferred compensation tax rules, including stock options granted with an exercise price that is less than the fair market value of the company's common stock on the grant date.
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12.20.2005Deadline Approaching for Several Transition Relief Amendments to Nonqualified Deferred Compensation PlansUpdatesThe deadline is rapidly approaching for amending nonqualified deferred compensation plans subject to Internal Revenue Code Section 409A to reflect certain transition relief provisions provided by IRS Notice 2005 1. If your plan has taken advantage of any of the following forms of transition relief, it must be amended by December 31, 2005.
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10.05.2005IRS Issues Section 409A Proposed Regulations - One-Year Extension for Many, but Not All, Deferred Compensation Compliance RequirementsUpdatesThe IRS has issued proposed regulations that expand the guidance available for complying with the deferred compensation tax rules of Section 409A of the Internal Revenue Code. Section 409A generally provides that amounts deferred under a nonqualified deferred compensation plan are currently includible in income if not subject to a substantial risk of forfeiture, unless the plan meets specified design and operational requirements. Failure to comply can result in significant federal income tax consequences, including a 20% additional tax.
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12.28.2004Treasury and IRS Issue First Round of Guidance on New Tax Rules for Deferred CompensationUpdatesOn December 20, 2004, the Treasury Department and the Internal Revenue Service issued Notice 2005-1 providing the first installment of guidance for the deferred compensation provisions of the American Jobs Creation Act of 2004, which are contained in new Section 409A of the Internal Revenue Code.
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10.20.2004Deferred No Longer? Congress Imposes Significant New Restrictions on Deferred CompensationUpdatesCongress recently approved the American Jobs Creation Act of 2004 (H.R. 4520), which includes provisions that impose significant new restrictions on deferred compensation. If these restrictions are not satisfied, deferred compensation amounts are taxable when vested and subject to tax penalties. President Bush is expected to sign the Act, but as of October 19th has not done so. This Update highlights the Act's key changes to deferred compensation requirements and offers practical guidance.
