Have a Tax Question? Ask a Tax Expert
Hello and thank you for using Just Answer,
Once an amount deferred under a nonqualified deferred compensation plan is taken into account as wages under the special timing rule, the nonduplication rule provides that neither that amount nor the income attributable to that amount is again treated as FICA wages.
Benefits under a nonqualified deferred compensation plan are subject to FICA tax whenactually or constructively paid to the extent the benefits relate to an amount deferredthat was not previously taken into account under the special timing rule.If your contributions were ,and and the amount was not subjected to FICA withholding st the time of the contribution then they will have FICA withheld on those amounts when distribution occurs. This will happen even if you are collecting Social Security at the time of the distributions.The fact that you are collecting Social Security does not effect the requirement to withhold on amounts that you were paid and then had contributed to the retirement fund in the past.
So the FICA tax will continue throughout the payout including after my death and my wife continues to receive the benefit?
There were some provisions for widows payments but it was my understanding that those were for widows that received the payments before 1999. You would need to ask the payer directly about the widows portion. If it is just a continuation of the original then iti s most likely the FICA will be applied.
Your positive rating is always thanks enough.
If you could also participate in the very short survey that Just Answer will send you by e-mail I would appreciate that very much.I really enjoyed working with you – please feel free to request me again when you come back to ask another question.