As a general matter, employers and others are required to report, on Form W-2 or Form 1099-Misc (whichever is applicable), various amounts attributable to nonqualified deferred compensation arrangements under section 409A of the Internal Revenue Code. For example, compensation that is deferred during a year is reportable, and deferred compensation that is received – or that is otherwise taxable under section 409A - is reportable. In addition, in the case of employees, taxable amounts generally constitute wages subject to withholding.

Last year, for purposes of 2007 information returns only, the IRS waived the application of certain of these requirements and modified others. Earlier this month, on December 5, 2008, the IRS issued proposed regulations providing guidance concerning these and other issues relating to nonqualified deferred compensation; those proposed regulations would be effective for years beginning after they are finalized. Then, on December 10, 2008, the IRS released Notice 2008-115, which prescribes rules relating to the reporting and withholding requirements for nonqualified deferred compensation for calendar year 2008, and for subsequent years until further guidance is issued (such as when the proposed regulations become final).

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