Section 409A Compliance Deadline Fast Approaching

The December 31, 2008, deadline for compliance with Section 409A of the Internal Revenue Code ("Section 409A") is quickly approaching, and employers should thoroughly review all "nonqualified deferred compensation arrangements" (as broadly defined by the Internal Revenue Service) to ensure documentary compliance by year-end. In addition, any necessary amendments or restatements to such arrangements must be adopted no later than December 31, 2008.

Background

Amounts subject to Section 409A that are deferred under a nonqualified deferred compensation arrangement are subject to current income taxation unless the nonqualified arrangement complies in form and in operation with the election, distribution and acceleration requirements of Section 409A. Failure to comply with the Section 409A requirements at any time during a taxable year will cause all amounts deferred under the nonqualified arrangement for that year and all preceding taxable years to be included in the