Title 26 — Internal Revenue CodeRelease 119-73
§4999 Golden parachute payments
Title 26 › Subtitle Subtitle D— - Miscellaneous Excise Taxes › Chapter CHAPTER 46— - GOLDEN PARACHUTE PAYMENTS › § 4999
Summary
A 20% tax applies to any "excess parachute payment" you receive (that term is defined in section 280G(b)). If the payment counts as wages under section 3401, withholding under section 3402 must cover this tax, and for subtitle F the tax is treated as a subtitle A tax.
Full Legal Text
Title 26, §4999
Internal Revenue Code — Source: USLM XML via OLRC
(a)There is hereby imposed on any person who receives an excess parachute payment a tax equal to 20 percent of the amount of such payment.
(b)For purposes of this section, the term “excess parachute payment” has the meaning given to such term by section 280G(b).
(c)(1)In the case of any excess parachute payment which is wages (within the meaning of section 3401) the amount deducted and withheld under section 3402 shall be increased by the amount of the tax imposed by this section on such payment.
(2)For purposes of subtitle F, any tax imposed by this section shall be treated as a tax imposed by subtitle A.
Legislative History
Notes & Related Subsidiaries
Statutory Notes and Related Subsidiaries
Effective Date
Section applicable to payments under agreements entered into or renewed after
June 14, 1984, in taxable years ending after such date, with contracts entered into before
June 15, 1984, which are amended after
June 14, 1984, in any significant relevant aspect to be treated as a contract entered into after
June 14, 1984, see section 67(e) of Pub. L. 98–369, set out as a note under section 280G of this title.
Reference
Citations & Metadata
Citation
26 U.S.C. § 4999
Title 26 — Internal Revenue Code
Last Updated
Apr 6, 2026
Release point: 119-73