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The Growing Importance Of Nonqualified Deferred Compensation Amid Tax-Rate Changes
by Andy Shourds

The current economic environment and likelihood of tax increases pose a complex challenge to today’s executives. The ability to save in a nonqualified deferred compensation (NQDC) plan may be essential for achieving major financial goals in the future.

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More Articles:
Converting Your Stock Option Spread Into Nonqualified Deferred Compensation
UPDATES! Tax Reform: Good Or Bad For Pretax Compensation Deferral?
Foreign Executives Moving To The United States To Work: What To Know About Your Company’s Nonqualified Deferred Compensation Plan
UPDATES! Tax Reform And The Impact On Nonqualified Deferred Compensation Plans
UPDATES! Future Higher Tax Rates Would Not Reduce The Current Appeal Of Nonqualified Plans
Participant Viewpoint: Tax Strategies With Stock Options, Restricted Stock, And Deferred Compensation
FAQs
Will I owe additional FICA taxes on the interest or earnings credited to my NQDC account when it is distributed?

This is determined by how these are calculated. In general, there is a…

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Can I get a private letter ruling from the IRS that my NQDC plan will not cause me to be immediately taxed?

You can get a ruling at least on the…

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More FAQs:
UPDATES! Is my company’s tax deduction limited by Section 162(m) for distribution amounts over $1 million? How does this make NQDC more appealing?
Can income from my NQDC distribution alone qualify me to establish an IRA?
Does the money in my NQDC plan count in the calculation when I convert a traditional IRA to a Roth IRA?
Can I roll over my distributions from the NQDC plan into an IRA and keep the tax-deferred status?
Does NQDC affect the annual earnings limit of Social Security?
Will NQDC distributions cause my Social Security benefits to be taxed?
I have started receiving Social Security payments. If I start receiving distributions from my NQDC plan, must I still pay Social Security tax on the income? Can this income cause my Social Security payments to be taxed too?
UPDATES! What is the tax treatment when the NQDC plan is set up to pay the benefits to my beneficiary upon my death?
If my beneficiary gets NQDC distributions because I died before receiving them, does the beneficiary owe income tax or FICA taxes on them?
What is the tax treatment of company-owned life insurance when my company pays part of the death benefit to my beneficiary?
I am a US executive moving overseas to work. When I live outside the United States, does the tax treatment change for deferrals and distributions under my nonqualified deferred compensation plan?
UPDATES! If I file an extension to complete my tax return after the IRS deadline, are there any mistakes I should avoid that involve nonqualified deferred compensation?
How do the taxes under the Affordable Care Act affect my Medicare tax rate and my planning for nonqualified deferred compensation?
Are the tax rules, withholding, and tax return reporting for NQDC different if I am an independent contractor, consultant, or outside director and not an employee?
When I receive distributions from my NQDC account, will I need to make estimated tax payments?
Is my NQDC part of my estate if I die before receiving all of the distribution(s)? What is the tax treatment?
If the distribution is not made at the exact time specified in the plan, how much earlier or later than the scheduled distribution date can I receive the payment without being penalized?
UPDATES! I plan to move. What if I live in a different state at distribution than the state where I worked? How is the distribution taxed?
UPDATES! Can I (or my company) fix a tax mistake I made in deferring my income or in the distribution without being penalized?
Which tax rates apply to distributions I receive in company shares: ordinary income or capital gains? What is the value of the distributed shares based on?
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NQDC Taxation
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