Deferred Compensation Plan Tax Treatment In New York
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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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We are pleased to present you with the New York City Deferred Compensation Plan Distribution Guide. The amount of such nonqualified deferred compensation that must be included in a nonresident's New York source income is determined as follows:.I am a new employee and have been told that if I join the Deferred Compensation Plan, I will not pay Social Security taxes. The NYC Deferred Compensation Plan (DCP) allows municipal employees to boost their retirement savings through taxdeferred contributions. The Deferred Compensation Plan provides tax advantages to help you save for your future.