Understanding Employee Benefits and key developments in the employee benefits field and items of interest to our clients. MORE

Back in 2013 I blogged about a class action lawsuit brought against Henkel Corporation for improper Social Security (FICA) tax withholding from nonqualified deferred compensation benefits. I am blogging now on an update to that case. To understand that case we need to review the taxation of nonqualified deferred compensation benefits. Nonqualified deferred compensation benefits

In many cases where the IRS claims that compensation is not “reasonable,” the focus is on whether the compensation is too high to be deductible by the employer. The arguments are often reversed in the S corporation context.¬†Because there is only one level of tax in the S Corporation, some owners try to minimize