Does deferred restricted stock count as compenstation for determining

[Guest Blindman]

Let's say an employee received wages of about $80,000 last year, but also received about $15,000 in restricted stock. Let also assume that the employee deferred the stock until this year under a non-qualified plan. Basically, my question is would this employee be an HCE for this year or not? Let's further assume that no of the other rules such as 5% owner apply.

Nothing I've read is clear on this issue.

[Guest b2kates]

This seems like a question regarding the timing of receipt of compensation. When you say restricted stock, Do you mean that the participant may not sell it currently.

under the principals of section 83, if it is subject to substantial risk of forfieture it is not compensation until the restriction is lifted. At that time it is part of compensation.

it seems to me that when it is included in comp is when it is counted for HCE status.

Brett

[Guest Blindman]

Thanks for your help.

This stock is restricted in the sense that it can't be sold unless it is held for at least six months. The stock became vested in the middle of last year, but the employee chose to defer it until the middle of this year. Social Security Tax was collected on the date of the defferal. The restricted stock showed up on the W-2 form in Box 11 as a Non-qualified plan.

Was any of that erroneous?