The Internal Revenue Service has released another batch of guidance aimed at taxpayers, employers and others interested in nonqualified deferred compensation plans.
The guidance, given in IRS Notice 2008-115, “provides interim guidance to employers and payers on their reporting and wage withholding requirements with respect to amounts includible in gross income under Section 409A of the Internal Revenue Code,” IRS officials write in the notice.
The section was created by the American Jobs Creation Act of 2004. The section sets the rules for determining when taxpayers can and cannot exclude nonqualified plan contributions from taxable income.
The IRS put out a notice in 2007, IRS Notice 2007-89, that described nonqualified plan reporting and withholding procedures for 2007.
The new notice describes procedures for reporting and withholding for 2008.
For now, until regulators provide more guidance, employers do not have to include nonqualified plan contributions in Box 12 of the Form W-2 using Code Y, officials write.
A payer also is not required to report deferred amounts in Box 15a of Form 1099-MISC, officials write.