Title 26 — Internal Revenue CodeRelease 119-73
§4999 Golden Parachute Payments
Title 26 › Subtitle Subtitle D— Miscellaneous Excise Taxes › Chapter 46— GOLDEN PARACHUTE PAYMENTS › § 4999
Summary
If you receive an "excess parachute payment" — an oversized payout tied to a change in company control, as defined in section 280G(b) — you owe an extra tax equal to 20 percent of that payment. When the payment counts as wages, your employer must withhold the extra 20 percent tax from your pay.
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