Louisiana Deferred Comp Withdrawal In Clark
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State:
Multi-State
County:
Clark
Control #:
US-00418BG
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Deferred compensation is an arrangement in which a portion of an employee's income is paid out at a date after which the income is actually earned. A Deferred Compensation Agreement is a contractual agreement in which an employee (or independent contractor) agrees to be paid in a future year for services rendered. Deferred compensation payments generally commence upon termination of employment (e.g., retirement) or death or disability before retirement. These agreements are often geared toward anticipated retirement in order to provide cash payments to the retiree and to defer taxation to a year when the recipient is in a lower bracket. Although the employer's contractual obligation to pay the deferred compensation is typically unsecured, the obligation still constitutes a contractual promise.
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The withdrawals are also subject to state income tax. Withdrawals of tax-deferred (traditional) contributions are subject to ordinary income taxes at the time of the distribution.The DROP provides a way for members who are eligible to retire to continue working while receiving a retirement benefit. Deferred compensation plans for eligible withdrawals of 457 money. You can participate in DROP for up to 36 months. This chapter outlines the steps to be taken when a member applies for retirement with the Deferred Retirement Option Plan (DROP). In no event shall the revocation of a participant's deferral authorization permit a distribution of deferred compensation, except as provided in §701.