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Compliance July 19, 2005
PA's Rendell Inks Non-Qual Tax Measure
July 19, 2005 (PLANSPONSOR.com) - Pennsylvania
Governor Edward Rendell has signed into law a bill mandating
that elective deferrals to nonqualified deferred compensation
(NQDC) plans are to be taxed when they are distributed and
not in the year in which they are earned.
Reported by Fred Schneyer
The bill, (HB 176), was designed to effectively overturn a 2004 Pennsylvania Commonwealth Court ruling, Ignatz versus Commonwealth of Pennsylvania, which found that voluntary NQDC contributions were to be taxed when they were earned and not when they were actually paid.
The new measure follows a move in early 2005 by the Keystone State’s Department of Revenue to stop enforcing the court ruling in light of Rendell’s suggesting a bill amending state tax law (See Keystone State DOR Withdraws NQDC Ruling ).
More information about the recently signed measure is here .