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An exemption from the Section 409A limits on deferred compensation that can apply to severance payments stemming from an involuntary separation of service. To be exempt, a payment cannot exceed two times the lesser of (1) the employee’s prior annual compensation or (2) the limit on compensation for qualified plans under IRC Section 401(a)(17). Additionally, the severance must be paid by the end of the second tax year after the year of separation. For more on severance payments and NQDC plans, see FAQs on the rules and on the six-month payout delay.