Ruth Wimer, Joseph Urwitz and Mia Midenjak wrote this bylined article on the FICA tax withholding rules for nonqualified deferred compensation plans. Because tax must be withheld when compensation vests, not actually paid later, “failure to withhold FICA tax at the time of vesting will cause the compensation plus any earnings to be subject to FICA tax later as it is distributed to the participant, potentially resulting in higher overall FICA taxes for both the employer and the participant,” the authors wrote.
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