The user wants me to rewrite a headline about Severance as Deferred Compensation and Code Section 409A.

Short summary

Section 409A of the Internal Revenue Code imposes strict timing rules and a 20% penalty on non-compliant deferred compensation, and severance arrangements can fall under its scope. Several exemptions exist—including the short-term deferral exemption, involuntary separation pay plan exemption, and reimbursement exemptions—that can be 'stacked' to cover different portions of a single severance arrangement. Proper structuring requires understanding each exemption's requirements around payment timing, amount limits, and termination conditions.

• •Severance may qualify as deferred compensation under Section 409A, triggering strict timing rules and 20% penalty for non-compliance
• •Multiple exemptions (short-term deferral, involuntary separation, reimbursements) can be stacked for a single arrangement
• •Key requirements include payment timing within 2.5 months, two-times compensation limits, and involuntary separation conditions

Generated with AI, which can make mistakes.