Some Good News About Deferred Compensation

May 15, 2012

Guest post for NAFCU written by Tom Telford

For some eight years now, the IRS has been considering the tax status of nonqualified deferred compensation plans offered by federal credit unions (FCUs). At issue is whether FCUs are entities of the federal government. In its analysis, the IRS concluded that FCUs are not because they are not federal instrumentalities. The IRS also had the option of finding that FCUs are eligible to offer these compensation plans because they are tax exempt organizations.

Implications under 409A for Operational and Documentation Failures

March 23, 2012

Congress imposed a rigid tax regime on nonqualified deferred compensation plans by adopting Section 409A of the Internal Revenue Code at the end of 2004.

Life insurance update for state-chartered credit unions in Indiana

March 20, 2012

Good news for state-chartered credit unions in Indi­ana. On March 6, 2012, Indi­ana sim­pli­fied the process for credit unions to buy life insur­ance to fund employee ben­e­fit plans.

Federal Credit Unions Should Be Pleased with Proposed Deferred Compensation Plan Regulations

January 17, 2012

By Rich Brock

Federal credit unions should expect good news later this year from the Internal Revenue Service, which since 2004 has been considering the tax status of nonqualified deferred compensation plans sponsored by FCUs.

CU Exempt Status Revocations

November 8, 2011

In the category of “What can go wrong,” the IRS has notified at least 20 federal credit unions and 239 state-chartered credit unions that their tax-exempt status has been revoked. The reason: the credit unions failed to file their Form 990 for three years in a row. Under the Pension Protection Act of 2006, failure to file for three consecutive years results in automatic revocation.