The Internal Revenue Service has pushed back the compliance date for the new Section 409A of the Internal Revenue Code.

Congress created the section when it passed the American Jobs Creation Act of 2004. The section establishes new tax rules for nonqualified deferred compensation arrangements.

The IRS set a Dec. 31, 2006, compliance date for temporary regulations issued in 2005.

Now, in Notice 2006-79, the IRS is pushing back the compliance date for most provisions back to Dec. 31, 2007.

In one section of the notice, “The ability to link a payment election under a nonqualified deferred compensation plan to a payment election under a qualified plan (including a 403(b) annuity and 457(b) plan) has been extended through 2007,” according to an analysis from Principal Financial Group Inc., Des Moines, Iowa. “An election as to the time and form of payment elections linked to a qualified plan are not acceptable after 2007. Thus, a plan currently providing for linkage and subject to 409A would need to be amended prior to 2008.”

IRS officials hope to issue final 409A regulations this year, according to the Principal analysis.