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Applying Section 409A to - Seyfarth Shaw

Practical Law Company provides practical resources for business lawyers. To find out more about us and register for a free trial, please visit 2010 Practical Law Publishing Limited and Practical Law Company, Inc. All Rights Reserved. Use of PLC websites and services is subject to the Terms of Use ( ) and Privacy Policy ( ).1 PLCLaw DepartmentPRACTICAL LAW COMPANY Section 409A of the Internal Revenue Code and its related regulations ( Section 409A) provide comprehensive rules governing the taxation of nonqualified deferred compensation. Very generally, "deferred compensation" is broadly defined as any form of compensation which is payable in the year after the year in which the legal right to payment arises. Severance payments are considered a form of deferred compensation subject to Section 409A unless an exception or exemption applies.

Separation from Service Generally, the most common Section 409A payment event giving rise to severance benefits is a "separation from service". However, the Section 409A definition may or may not be different from the company's practice on termination of employment. Under Section 409A, a separation from service occurs when

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Transcription of Applying Section 409A to - Seyfarth Shaw

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