Despite the simple and catchy sound-bites, the “no tax on tips” and “no tax on overtime” opportunities under the One Big Beautiful Bill Act (the “OBBBA”) have limits and require administration by both employers and employees. Most significantly, the tax savings are in the form of deductions, rather than exclusions, which means that tips and
FICA Tax: Navigating the Nonqualified Deferred Compensation Special Timing Rule
By Tyler Forni, David B. Teigman & Andrea S. Rattner on
Compensation is generally subject to federal income tax and FICA tax when compensation is actually paid to an employee. However, nonqualified deferred compensation (NQDC) may be subject to FICA taxation before federal income taxation under a FICA tax special timing rule. The scope of NQDC subject to FICA taxation is broad, including voluntary deferrals of…