Advisories

President Bush Signs New Law Regarding Nonqualified Deferred Compensation Plans

November 2004

On October 22, 2004, President Bush signed the American Jobs Creation Act of 2004 (the "Act") (H.R. 4520) into law. The Act adds Section 409A ("Inclusion in Gross Income of Deferred Compensation Under Nonqualified Deferred Compensation Plans") to the Internal Revenue Code of 1986, as amended (the "Code"). Section 409A of the Code tightens the tax laws regarding nonqualified deferred compensation plans or other individual or group arrangements deferring recognition of compensation for federal income tax purposes. Because Section 409A of the Code has an effective date of January 1, 2005, there are actions that you should begin to take now in order to prepare for the new requirements.