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NEW! Beware Of Traps In Employment Agreements Under Section 409A

It’s important to review executive employment agreements for compliance with Section 409A of the tax code. The failure of your company to comply with Section 409A results in expensive tax payments not by your company, but for you. This article presents some of the more common Section 409A compliance issues for you to be aware of related to employment agreements.

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Key Points in This Article
Review executive employment agreements for compliance with Section 409A of the tax code. The failure of your company to comply with Section 409A results in expensive tax payments not by your company, but for you, the executive.
Common pitfalls occur in bonus arrangements, whether short-term or long-term. Be careful with early-vesting provisions for retirement and with bonus deferral elections.
Separation from service is an especially tricky area. Section 409A violations can easily arise from post-retirement consulting arrangements, substitution payments, and issues involving general release and reason for termination.