Deferred Compensation

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Deferred Compensation

Deferred Compensation means:
a plan under whose terms an employee defers payment of a portion of salary in return for the employer's promise to pay the employee the salary at some time in the future. Deferred compensation is common in the sports and entertainment industries. Former IRC (check if this IRC provision is current here) §401.See rabbi trust; secular trust.

Description and Definition of Deferred Compensation

A portion of earnings withheld by an employer or put into a retirement plan for distribution to the employee at a later date. If certain legal requirements are met, you do not pay tax on qualified deferred compensation until you receive the distributions.


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