Employers computing taxable income under the accrual method to unrelated taxpayers may deduct wages accrued as compensation expense in one year and paid in the subsequent year, as long as the company makes the payment within 2½ months after the employer's year-end.

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This statement is true according to the IRS guidelines for using the accrual method of accounting for taxable income. Employers can deduct wages that have been accrued as compensation expense in one year and paid in the subsequent year as long as the payment is made within 2½ months after the end of the employer's year-end.

Employers Computing Taxable Income Under the Accrual Method to Unrelated