Deferred Compensation Election Deadline – March 15, 2005; New Supplemental Withholding Rules for Compensation in Excess of $1 Million

As noted in our prior LawFlashes, the recent Internal Revenue Service (IRS) guidance (Notice 2005-1) with respect to implementation of the new deferred compensation restrictions set forth in Section 409A of the Internal Revenue Code (added by the American Jobs Creation Act of 2004) provides the following:

• General Rule
• Exception for 2005
• Plan Revisions by December 31, 2005
• Election Revocation/Modification Opportunity
• Uncertain Scope of Six-Month Rule
• Uncertain Status of “Excess Plan” Elections
• New Supplemental Wage Withholding Rate Applies to Compensation in Excess of $1 Million

For more detailed coverage of Section 409A, please view the PDF.