There is no constructive receipt if a substantial limitation was imposed upon the time or manner of payment of compensation.

Normally, deferred compensation agreements are in effect before the year in which the compensation is earned. This avoids the possibility that the compensation was earned and constructively received by the employee prior to the deferred compensation agreement.

There is no economic benefit if the deferred compensation plan was unfunded, i.e., the employer merely promised to pay future benefits and established no trust to pay amounts promised to employees.

Ask the employer if there is an IRS ruling on the plan's tax status.

If IRS ruled the payments are taxable for income tax purposes when actually paid to the employee, the payments are not wages at the time of deferral.

If there is no IRS ruling:

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  determine if payments were actually or constructively paid, or if an economic benefit was derived;

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  obtain a copy of the deferred compensation plan;

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  ask how the employer reported the deferred amount for social security purposes and basis for such reporting; and

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  make a determination based on the facts obtained.