FICA Taxes

[Guest Aaron Martin]

I am looking for comments on when FICA taxes are payable if a bonus is earned in the current year but paid in the following year with the 2 1/2 month window.

Example: 100 dollar bonus vests (no risk of forfeiture) on 12/31 but is not paid by the company until March 3rd of the following year. A participant elects to defer $50 of the bonus into the nonqualified deferred compensation plan and receive the remaining $50 dollars in cash. Are FICA taxes on the $50 deferred in the plan payable on 12/31 versus March 3rd?

[ETA Consulting LLC]

No.

[Guest Aaron Martin]

No.

I read the regs as if the special timing rules would apply because the $50 deferred into the planwould be paid beyonnd the 2 1/2 month window, i.e., retirement. Thus, causing FICA taxes due on 12/31.