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Key tax principle governing the ability to defer both the income inclusion and the taxation of nonqualified deferred compensation. You owe taxes either (1) when you receive compensation or (2) before you have actually received the compensation if you have full rights to the compensation without any risk of forfeiture. Because NQDC is subject to risks from corporate insolvency and the company’s creditors in a bankruptcy, no taxes are triggered until the money is distributed. See constructive receipt doctrine for another set of criteria that affects income inclusion and taxes for deferred compensation.