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Frequently Asked Question
Can I protect myself from tax penalties through provisions in my NQDC agreement or employment agreement?

You can try to require the company to amend its plan if it is found to be inconsistent or in violation of 409A, or the company can agree to indemnify you against any penalties. While companies usually do not agree to this, you can attempt to negotiate for the inclusion of language such as the following…

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More FAQs
Is changing the investment choices in my NQDC account allowed by Section 409A?
After I stop working for my company, can I continue to consult or perform any services for it without causing problems related to my NQDC distributions?
Can certain life events accelerate distributions, such job loss, disability, an unforeseeable emergency, or death?
How do I change the timing or form of my distribution?
If my company pays my bonus just a few months after the end of the year, is that nonqualified deferred compensation? Is there a grace period or short-term exception so that it is not penalized?
What appears on my W-2 if my plan has violated Section 409A?
Can I protect myself from tax penalties through provisions in my NQDC agreement or employment agreement?
Can I (or my company) fix a tax mistake I made in deferring my income or in the distribution without being penalized?
Does the IRS scrutinize companies’ NQDC arrangements in search of compliance problems with 409A?
What are the penalties if my NQDC plan violates Section 409A?

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