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Code Section 457(f): Potential Timing Trap for Nonprofit Employers and Employees

Business Minute | 10.02.22

Nonprofit (tax-exempt) employers are treated differently than for-profit employers with respect to how deferred compensation is taxed. Internal Revenue Code Section 457 (Section 457) is the main tool for this. Some of the timing issues under Section 457 may pose a trap for those not familiar with them.