ARLINGTON, Va. – NAFCU is seeking input from its members on a new section of the Internal Revenue Code that provides guidance on nonqualified deferred compensation plans. Treasury and IRS issued clarifications last Wednesday on guidance on distributions and other features of nonqualified deferred compensation plans addressed under section 409(A) of the Internal Revenue Code. The clarifications are that changes in a plan having to do with payment elections affecting previously deferred income will not be treated as an acceleration of plan payments. Both agencies also clarified that any plan adopted before Dec. 31, 2005 can be terminated and deferral elections can be canceled without making the plan noncompliant with the law. On Dec. 20, 2004, both agencies issued a notice saying unless specified requirements are met, all amounts deferred under a nonqualified deferred compensation plan for all taxable years are currently includible in gross income, to the extent not subject to a substantial risk of forfeiture and not previously included in gross income. Credit unions are not likely to be impacted by the new 409(A) section, CUNA has reported. By June, however, the IRS is scheduled to issue guidance on whether FCUs are considered “federal governmental instrumentalities” and thus, able to offer 457(f) plans using a for-profit model.