Qualified deferred compensation plans have the following characteristics except:
A)Taxation of earnings is postponed.
B)Employee taxation occurs when payment is received.
C)Employee contributions are made on an after-tax basis.
D)Employer deducts contributions when made.

Question

Quizplus · Accepted Answer

Qualified deferred compensation plans allow for pre-tax contributions from employees, not after-tax contributions as stated in option C. This means that employees contribute a portion of their earnings before taxes are applied, which reduces their taxable income.

Qualified Deferred Compensation Plans Have the Following Characteristics Except