Intro to Nonqualified Deferred Compensation (NQDC)
Author: Daniel Johnson
| CPE Credit: |
1 hour for CPAs
1 hour Federal Tax Related for EAs and OTRPs
1 hour Federal Tax Law for CTEC |
Per the IRS Education Provider Standards this course must be COMPLETED by 12/31/2027 to receive credits. NOTE: Go to My Professional Profile in your CCH CPELink account settings to ensure your name, and PTIN number; matches your PTIN card
This course offers a concise yet comprehensive introduction to nonqualified deferred compensation (NQDC) plans. Participants will learn about the key features, compliance requirements, and taxation of NQDC plans. They will explore various plan designs and funding options while developing the skills to recommend appropriate strategies based on clients' individual financial circumstances. By the end of the course, participants will be prepared to design, implement, and manage NQDC plans effectively.
Publication Date: September 2024
Designed For
Financial/tax professionals working with executive clientele
Topics Covered
- Introduction to NQDC plans
- Section 409A requirements and compliance
- Taxation of NQDC plans
- NQDC plan designs and features
- Financing and funding options
- Strategies for recommending NQDC plans to clients
Learning Objectives
- Identify the key characteristics and mechanics of nonqualified deferred compensation (NQDC) plans
- Identify the requirements and compliance considerations for NQDC plans under Internal Revenue Code Section 409A
- Identify the taxation of NQDC plans for both employers and employees at the time of deferral, vesting, and distribution
- Explain how to differentiate between the various types of NQDC plan designs, such as salary deferrals, supplemental executive retirement plans (SERPs), and excess benefit plans, and their specific features
- Explain how to evaluate the advantages and disadvantages of different financing and funding options for NQDC plans, including corporate-owned life insurance (COLI) and rabbi trusts
- Explain how to assess clients' financial situations, goals, and risk tolerances to recommend appropriate NQDC strategies that align with their individual needs and circumstances
Level
Basic
Instructional Method
Self-Study
NASBA Field of Study
Taxes (1 hour)
Program Prerequisites
None
Advance Preparation
None
