Deferred Compensation May Live to See Another Day

Legal Alert

November 10, 2017

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In an about face, a last minute amendment introduced yesterday to the House Tax Cuts and Jobs Act (the “Act”) would eliminate changes to non-qualified deferred compensation contained in the original draft of the Act. Our alert regarding these proposed changes can be found here. With this amendment, the current non-qualified deferred compensation regime under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), is preserved. The amendment also eliminates changes that were proposed to Section 457 of the Code that would have effectively eliminated deferred compensation plans for tax-exempt organizations. The House Ways and Means Committee has now approved the Act, with this amendment.

However, the text released by the Senate Finance Committee yesterday evening retains the same changes to deferred compensation contained in the Act prior to yesterday’s amendment.

We will continue to monitor and provide updates on changes to the Act that could impact deferred compensation or other employee benefit plans.