The U.S. Senate and House of Representatives both passed versions of a bill
that seeks to change the way American exports are taxed, among other things.
The Senate version (S. 1637) passed on May 11, 2004, and the House bill (H.R.
4520) passed on June 17, 2004.
While the major components of H.R. 4520 (the American Jobs Creation Act of
2004) address taxation on exports, corporate tax rates, and job creation, the
bill also makes changes to nonqualified deferred compensation programs. For
example, under the legislation:
- Elections under nonqualified deferred compensation plans must be made in
the calendar year before the year in which the services are performed; and
- Payments made under nonqualified deferred compensation programs cannot be
accelerated before the time specified or the schedule chosen at the time of
S. 1637 included provisions not mentioned by H.R. 4520. For instance, under
the Senate's version, nonqualified deferred compensation programs would not
be able to offer more investment options than those available under the employer's
qualified defined contribution plan with the fewest investment options.
While acknowledging that H.R. 4520 includes a few provisions he dislikes, Representative
Jim Kolbe (R-Arizona) says he is pleased overall. "This legislation does
many ... important things necessary for keeping the economic recovery alive.
It extends many expiring tax provisions, including the research and experimentation
tax credit, the work opportunity tax credit, the welfare-to-work tax credit,
the deduction for teacher classroom expenses, and the deduction for corporate
contributions of computer equipment. It contains several provisions that benefit
small businesses, manufacturers, and farmers ...."