The Gulf Opportunity Zone Act of 2005 (H.R. 4440), which was signed into law on December 21, (P.L.109-135.) contains some provisions amending section 409A slightly. Here is some helpful info regarding the changes made:
(1) A summary of the changes made to 409A from the Technical Description of the Gulf Opportunity Zone Act (Joint Committee on Taxation, 12/16/05):
Nonqualified deferred compensation plans (Act sec. 885).-The provision clarifies that the additional tax and interest under the nonqualified deferred compensation provision of the Act are not treated as payments of regular tax for alternative minimum tax purposes. The provision also clarifies that the application of the rule providing that certain additional deferrals must be for a period of not less than five years is not limited to the first payment for which deferral is made. The provision also clarifies that Treasury Department guidance providing a limited period during which plans can conform to the requirements applies to plans adopted before January 1, 2005. The provision also clarifies that the effective date of the funding provisions relating to offshore trusts and financial triggers is January 1, 2005. Thus, for example, amounts set aside in an offshore trust before such date for the purpose of paying deferred compensation and plans providing for the restriction of assets in connection with a change in the employer’s financial health are subject to the funding provisions on January 1, 2005. Under the provision, not later than 90 days after the date of enactment of this provision, the Secretary of the Treasury shall issue guidance under which a nonqualified deferred compensation plan which is in violation of the requirements of the funding provisions relating to offshore trusts and financial triggers will be treated as not violating such requirements if the plan comes into conformance with such requirements during a limited period as specified by the Secretary in guidance. For example, trusts or assets set aside outside of the United States that would otherwise result in income inclusion and interest under the provision as of January 1, 2005, may be modified to come into conformance with the provision during the limited period of time as specified by the Secretary.
(2) Text of the GO Zone Act amending Section 409A:
(hh) AMENDMENTS RELATED TO SECTION 885 OF THE ACT.—
(1) Paragraph (2) of section 26(b) is amended by striking ‘‘and’’ at the end of subparagraph (R), by striking the period at the end of subparagraph (S) and inserting ‘‘, and’’, and by adding at the end the following new subparagraph:‘‘(T) subsections (a)(1)(B)(i) and (b)(4)(A) of section 409A (relating to interest and additional tax with respect to certain deferred compensation).’’.
(2) Clause (ii) of section 409A(a)(4)(C) is amended by striking ‘‘first’’.
(3)(A) Notwithstanding section 885(d)(1) of the American Jobs Creation Act of 2004, subsection (b) of section 409A of the Internal Revenue Code of 1986 shall take effect on January 1, 2005. (B) Not later than 90 days after the date of the enactment of this Act, the Secretary of the Treasury shall issue guidance under which a nonqualified deferred compensation plan which is in violation of the requirements of section 409A(b) of such Code shall be treated as not having violated such requirements if such plan comes into conformance with such requirements during such limited period as the Secretary may specify in such guidance.
(4) Subsection (f) of section 885 of the American Jobs Creation Act of 2004 is amended by striking ‘‘December 31, 2004’’ the first place it appears and inserting ‘‘January 1, 2005’’.
(3) This post here contains the text of section 409A which has now been revised to reflect changes made by the GO Zone Act.
I have also added the following links, as well as a link to this post on the GO Zone Act changes, to the 409A section over in the sidebar: