Section 409a

22 2004 the secretary of the treasury shall issue guidance on what constitutes a change in ownership or effective control for purposes of section 409a of the internal revenue code of 1986 as added by this section.
Section 409a. 409a b 2 a. Salary and bonus deferral arrangements. In the case of compensation deferred under a nonqualified deferred compensation plan there is a transfer of property within the meaning of section 83 with respect to such compensation as of the earlier of i r c.
Section 409a of the united states internal revenue code regulates nonqualified deferred compensation paid by a service recipient to a service provider by generally imposing a 20 excise tax when certain design or operational rules contained in the section are violated. Irc 409a a 1 a amounts deferred and subject to inclusion under section 409a a 1 a are also subject to a penalty tax of 20 of the amount included the additional 20 tax in income. All compensation deferred under the plan for the taxable year and all preceding taxable years shall be includible in gross income for the taxable year to the extent not subject to a substantial risk of forfeiture and not previously included in gross income.
Not later than 90 days after the date of the enactment of this act oct. Ii application only to affected participants. Section 409a calls for the annual taxation of a nonqualified deferred compensation plan that violates the provision of section 409a.