>In a notice posted on its Web site, the IRS noted that Code Z should be used by employers “to identify income recognized due to participation in a nonqualified deferred compensation plan that fails to meet the requirements of Internal Revenue Code section 409A that was added by section 885 of the American Jobs Creation Act of 2004.” It needs to be reported separately, according to the Web site, because it is subject to additional tax and interest.
>This new law will not affect Social Security and Medicare wages, according to the notice, since nonqualified deferrals for employees are usually subject to taxes on these services when they are performed. These taxes will be delayed, the notice said, “during the period when an employee’s right to receive payment of the wages is subject to a substantial risk of forfeiture.”
>Income recognized under Section 409A for nonemployees should be reported in both boxes and 15b, the notice added.
« JP Morgan to Shed Private Equity Arm