I have recently been assigned a Non qualified deferred compensation plan and I wanted to seek some advice as this is my first NQDC plan.
I have been notified by my client that their payroll company does not understand how to calculate the FICA tax on contributions being made to the plan on the participants behalf. They have a handful of participants that became 100% vested for 2007 and as such the participant contributions made to the plan are subject to FICA and FUTA. It is my understanding that the payroll provider will need to calculate the tax which should be reported in the last month (or quarter) of the following plan year. So, the required tax for the 2007 plan year will need to be reported in December 2008. This pretty much wraps up the extent of kwowledge that I have on this and the partner at my firm is unavialble until Monday. I am to have a conference call with the client and the payroll provider this afternoon and I am not sure if there is more information that I will need to provide. Has anyone had this situaton where a payroll provider was unclear on how to calculate the tax? Do you know of some way I can better communicate what needs to be done for the client and the payroll provider? The worst thing is that I don't even know what I don't know!!!! Any help anyone could provide would be awesome!