FICA tax timing rule for nonqualified deferred compensation applied to taxpayer attempt to limit current income subject to FICA

Article Abstract:

Hoerl Associates PC v US gave the district court the chance to apply the Federal Insurance Contributions Act (FICA) tax rules to nonqualified deferred compensation plans. A husband-and-wife physician team sought to avoid having their income from their professional corporation being subject to FICA taxation by having each of them pay in alternating years. The court held this arrangement to be a nonqualified deferred compensation plan and, based on IRC 3121(v)(2), decided that income should be liable for FICA tax in the year in which it was earned.

Cases

---

Notice gives guidance on FICA and FUTA taxation of nonqualified deferred compensation

Article Abstract:

An IRS Notice regarding FICA and FUTA withholdings for non-qualified deferred compensation plans provides little guidance, but it does establish that the IRS will accept reporting through 1994 that meets a reasonable good faith standard and will not apply future regulations retroactively. Contributions to a non-qualified deferred compensation plan that is fully vested are taxed when earned and therefore subject to FICA and FUTA taxation. Changes in the tax laws are increasing the income levels subject to these withholding taxes.

---

Section 3121(v) FICA/FUTA deferred compensation regulations finalized

Article Abstract:

The IRS final regulations concerning the Social Security taxation of deferred compensation which were issued in Jan 1999 make few changes from the existent proposed regulations. The complex and lengthy regulations address issues including timing, interest rates, and income credits. Employers are provided some flexibility in making determinations when uncertainty may exist.

United States, Tax Law, Public Finance Activities, Administration of Human Resource Programs (except Education, Public Health, and Veterans' Affairs Programs), Social Security, Social security taxes

Similar abstracts:

• Abstracts: Cloudy standards for rainmaking; Georgia court says lawyers may not solicit clients in person, though CPAs can
• Abstracts: Motion strategy key for Prez; lawyers who defended impeachment targets urge Clinton to take offensive. Elian's dream team; facing a new hearing, the Cuban has many lawyers, none his
• Abstracts: Ethics. The departing lawyer would be obligated to pay costs incurred by the law firm
• Abstracts: Trial lawyers set to get tough: at ATLA convention, group is told to 'get the message out' on tort bill. ATLA alters stance on implants
• Abstracts: Changing the rules. New opportunities; two ABA leaders rise to key positions at EEOC. Grassroots lessons

This website is not affiliated with document authors or copyright owners. This page is provided for informational purposes only. Unintentional errors are possible.