irsiscrazy Posted May 14, 2018 Share Posted May 14, 2018 I have a client who has a defined benefit Supplemental Executive Retirement Plan. The question is: what IRS reporting form should payments under this Plan be reported on (W-2, 1099-R, 1099-Misc)? Here are the pertinent facts: This is a non-qualified Supplemental Executive Retirement Plan aka, SERP The Plan is unfunded The covered executives made no contribution to the Plan: IT IS NOT A NQDC! The defined benefits are computed based on years-of-service combined with a targeted percentage of final average compensation. The benefits are paid out of general company funds on a monthly basis There is NO SURVIVOR BENERFIT There is a very strict anti-alienation clause There is no option to take a lump-sum payment Given these parameters, what year-end IRS form should these payments be reported on? Specific cites to IRS rules and regulation would be most appreciated. Link to comment Share on other sites More sharing options...
jpod Posted May 14, 2018 Share Posted May 14, 2018 On the assumption that these benefits were earned by participants in their capacities as W-2 employees, the payments are all reportable on Form W-2 and subject to FIT withholding and other applicable tax withholdings. Note that per IRC Section 3121(v) the FICA/Medicare tax liabilities accrue and are due and the employee share subject to withholding at the time of vesting, or if later when the present value of the benefit becomes determinable, rather than only as and when payments are made. If the payor is just starting to think about all this stuff now, after payments have commenced, it needs to take two aspirin and call the doctor in the morning. Link to comment Share on other sites More sharing options...
XTitan Posted May 15, 2018 Share Posted May 15, 2018 Semantics, but a SERP is a form of a non-qualified deferred compensation plan. You don't need voluntary deferrals or account balances, so the language in the 1099/W-2 instructions still apply. Nothing to add to jpod's fine response, including the aspirin part. - There are two types of people in the world: those who can extrapolate from incomplete data sets... Link to comment Share on other sites More sharing options...
Luke Bailey Posted May 16, 2018 Share Posted May 16, 2018 Note that in addition to above (all of which I agree with), you need to check whether state tax rules conform to federal, e.g. for SUI. Luke Bailey Senior Counsel Clark Hill PLC 214-651-4572 (O) | LBailey@clarkhill.com 2600 Dallas Parkway Suite 600 Frisco, TX 75034 Link to comment Share on other sites More sharing options...
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