What is 409A?
Section 409A specifies the requirements that need to be met for amounts to be deferred under a nonqualified deferred compensation plan. These requirements, including a substantial risk of forfeiture, need to be met on all amounts deferred or they will be includible in the participant’s gross income in the year deferred.
Why is 409A compliance important?
Compliance with 409A is critical because companies must abide by its rules and specific requirements; otherwise, the IRS can assess penalties. These penalties usually affect company employees and shareholders and can result in significant financial loss.
Why 409A Direct?
If you are a small- to medium-sized business that wants to implement a deferred compensation plan quickly, easily and cost-efficiently for your highly compensated employees, 409A Direct is your solution!
