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Section 409A
IRC Section 409A
Section 409A: Current Regulations Governing Nonqualified Plans
In response to perceived abuses of executive benefit and compensation practices, President Bush signed the American Jobs Creation Act into law creating sweeping changes to the design and operation of nonqualified benefit plans. Under the new statute, deferred compensation that does not meet specific requirements set forth under Section 409A is subject to immediate taxation, plus a 20% penalty, and interest for the underpayment of tax.

Due to the broad nature of the statute, the significant number of affected plans, and the severe penalty associated with any form of noncompliance, Section 409A is expected to generate significant revenues for the Treasury. According to the Congressional Joint Committee on Taxation, the new statute is expected to generate tax revenues of $158 million in the first year and $1.051 billion over the next ten years.
Overview: Final 409A Regulations
Correction Program: Operational Failures
Understanding the New Rules of Section 409A
(Apr 2008) Updated: 3/20/10
(Powerpoint presentation)
Source Documentation:
IRC Section 409A: Final Regulations
IRC Section 409A: Proposed Regulations
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BOLI/COLI
Nonqualifed Plans
Split Dollar Plans
Frequently Asked Questions Regarding Section 409A
The following articles describe key provisions of Section 409A and summarizes important IRS announcements affecting nonqualified benefit plan sponsors and plan participants:
(Issued 4/10/07)
409A Reporting and Withholding Delayed
NQDC Regs Finalized: What's New, What's Not
For additional articles, recent events and/or changes that affect Section 409A see News Bulletins listed under Resources.
Correction Program: Documentary Failures
(Mar 2010)
(May 2007) Updated: 3/20/10
(Issued 9/29/05)
(Feb 2009) Updated: 3/20/10