Happy Halloween: 409A Deadline Extended
The IRS has provided employers with a nice little Halloween treat. The deadline for bringing nonqualified deferred compensation plans and arrangements into full compliance with Section 409A of the Internal Revenue Code has been extended to December 31, 2008.
409A covers a wide variety of nonqualified deferred compensation, including cash-deferred compensation plans and agreements regarding severance, bonuses and stock options. Among other things, 409A provides strict requirements for participants to avoid negative tax consequences, including premature taxation, an additional 20% federal tax and an interest-charge tax.