(a) For the purpose of this section, the following definitions shall apply unless the context clearly indicates or requires a different meaning.
NONQUALIFIED DEFERRED COMPENSATION PLAN.
A compensation plan described in Section 3121(v)(2)(C) of the Internal Revenue Code.
QUALIFYING LOSS.
The amount of compensation attributable to a taxpayer’s nonqualified deferred compensation plan, less the receipt of money and property attributable to distributions from the nonqualified deferred compensation plan. Full loss is sustained if no distribution of money and property is made by the nonqualified deferred compensation plan. The taxpayer sustains a qualifying loss only in the taxable year in which the taxpayer receives the final distribution of money and property pursuant to that nonqualified deferred compensation plan.
QUALIFYING TAX RATE.
A. The applicable tax rate for the taxable year for the which the taxpayer paid income tax to the city with respect to any portion of the total amount of compensation the payment of which is deferred pursuant to a nonqualified deferred compensation plan.
B. If different tax rates applied for different taxable years, then the
QUALIFYING TAX RATE
is a weighted average of those different tax rates. The weighted average shall be based upon the tax paid to the city each year with respect to the nonqualified deferred compensation plan.
REFUNDABLE CREDIT.
The amount of the city income tax that was paid on the nondistributed portion, if any, of a nonqualified deferred compensation plan.
(b) If, in addition to the city, a taxpayer has paid tax to other municipal corporations with respect to the nonqualified deferred compensation plan, the amount of the credit that a taxpayer may claim from each municipal corporation shall be calculated on the basis of each municipal corporation’s proportionate share of the total municipal corporation income tax paid by the taxpayer to all municipal corporations with respect to the nonqualified deferred compensation plan.
(c) In no case shall the amount of the credit allowed under this section exceed the cumulative income tax that a taxpayer has paid to the city for all taxable years with respect to the nonqualified deferred compensation plan.
(d) The credit allowed under this section is allowed only to the extent the taxpayer’s qualifying loss is attributable to:
(1) The insolvency or bankruptcy of the employer who had established the nonqualified deferred compensation plan; or
(2) The employee’s failure or inability to satisfy all of the employer’s terms and conditions necessary to receive the nonqualified deferred compensation.
(Ord. 52-15, passed 11-4-2015)