How does a payor employer report retirement payments of a Nonqualified

[Guest Jeff Moore]

How does a payor employer repor retirement payments of a Nonqualified Retirement Plan to a payee? Would the employer use a 1099 R, 1099 MISC, W-2 or something completely different? Thanks.

[Guest]

Need more information about the payee -- was he an employee or an independent contractor? Generally, deferred compensation paid with respect to services peformed by an *employee* are reported on Form W-2. Also, don't forget the FICA (unless previously taken into account under section 3121(v)).

[Guest Jeff Moore]

Thank you for the information.

The payee was an employee of the employer. Further, there has not been any deferral of compensation. This plan is basically a nonqualified "pension" plan rather than a nonqualified "deferred compensation" plan. Does this make any difference in your original answer? From my research, I don't think it does. I may be wrong.

Thanks.

[Guest Barnard Walsh]

My Trust Department will pay Participants, and IRS tax withdolding, directly from the NQ plan's trust. The trust is owned by the employer. It is irrevocable and is subject to the company's creditors. The employer is responsible for providing the W-2 form for employees, when payments are made from this non-qualified deferred compensation plan.

[Guest Robin Davis]

No, Jeff, you weren't wrong. Whether or not the plan is a "pension" type plan or what's known as a true deferred comp plan, for tax purposes the retirement benefit payment is treated as income to the executive. Therefore, the payment is reported as ordinary income on their W-2 (or 1099 if a contract employee)and the company is able to take a deduction as compensation paid.

I hope that helps!

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Robin Davis

D&D Benefits, L.L.C.