Taxes on Distributions from NQDC plan

[Guest benefitsanalyst]

For a distribution to be reported on Form W2 from a non-qualified deferred compensation plan, what withholding rate for federal taxes should be taken?

[Guest TAG]

BA,

Problem is you never know what additional income these individuals have so can't always assume the wage tables will work. As a rule, we withhold at the 25% supplemental rate to be safe unless the client requests otherwise. Lots of scenarios to go otherwise with.

TAG

[Harwood]

http://www.irs.ustreas.gov/pub/irs-pdf/p15.pdf

"Supplemental Wages"