Which of the Following Statements Is Incorrect Regarding Unfunded Deferred

question 74

Multiple Choice

Which of the following statements is incorrect regarding unfunded deferred compensation plans?

• A)The employee is not taxed on the compensation amount when it is deposited in an escrow account.
• B)An accrual-basis employer can deduct the compensation amount when it is accrued in the year of service.
• C)An employee is taxed when the amount is actually paid or made available.
• D)A 20% excise tax will apply if the employee can voluntarily elect to receive payment early.

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