Non-Qualified Deferred Compensation - NQDC

外汇网2021-06-19 13:54:41 132

Compensation that has been earned by an employee, but not yet received from the employer. Because the ownership of the compensation - which may be monetary or otherwise - has not been transferred to the employee, it is not yet part of the employee's earned income and is not counted as taxable income.

NQDCs emerged because of the cap on contributions to government-sponsored retirement savings plans. High-income earners are unable to contribute the same proportional amounts to their tax-deferred retirement savings as average or low-income earners. NQDCs, therefore, are a way for high-income earners to defer the actual ownership of income and avoid income taxes on their earnings while enjoying tax-deferred investment growth.

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NQDCs

emerged

taxable

income

counted

Non-Qualified Deferred Compensation - NQDC

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