As we have noted previously, March 15 is tax “Code Section 409A Day.” For employers with calendar fiscal years, that is generally the last day an amount can be paid and still qualify as a short-term deferral that is exempt from 409A’s stringent timing and form of payment requirements. But what does one do when March 15 falls on a weekend, as it does this year? You likely aren’t cutting payroll checks on a Saturday. Can you wait until Monday to pay?
The answer is no. The rules are clear that the payment generally has to be made by the 15th day of the 3rd month (hence, March 15) of the year following the year in which either the right to the compensation arises or the compensation is no longer subject to a substantial risk of forfeiture (and note that for this purpose, the 409A definition