PRIA, Government Policy, Made Personal

Summary

Anyone who gets an excess parachute payment must pay a tax equal to 20% of that payment. The phrase "excess parachute payment" is defined in section 280G(b). If the payment counts as wages (see section 3401), employers must increase the amount they withhold under the payroll rules (section 3402) by that 20% tax. For tax-administration rules under subtitle F, this tax is treated the same as a tax under subtitle A.

Title 26, §4999

Internal Revenue Code, Source: USLM XML via OLRC

(a)Imposition of tax

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)Excess parachute payment defined

For purposes of this section, the term “excess parachute payment” has the meaning given to such term by section 280G(b).

(c)Administrative provisions

(1)Withholding

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)Other administrative provisions

For purposes of subtitle F, any tax imposed by this section shall be treated as a tax imposed by subtitle A.

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.

§4999 Golden Parachute Payments

Summary

Title 26, §4999

Notes & Related Subsidiaries

Statutory Notes and Related Subsidiaries

Effective Date

Citations & Metadata