12.22.14 – (LAA) Equity Stock Awards Tax Deferral

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December 22, 2014


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Equity Stock Awards Tax Deferral – retirement@apfa.org
Last Thursday, President Obama signed into law (H.R.2591/S.2614) a change to the rules governing the ability of airline employees to defer a portion of their Equity Stock Awards from bankruptcy claims into their 401k accounts.

For employees of any airline that filed bankruptcy on November 29, 2011, and subsequently had their pensions frozen, they may now participate in this tax deferral option. American Airlines is included in this definition.

It will take a few weeks for detailed guidance to be issued by the IRS, but it appears that AA employees will be able to convert a portion of the Equity Stock Awards that were issued over the last year into 401k contributions, and can make this election and contribution retroactively to include 2013. If converting the 2013 shares results in reduced taxes due for 2013, then a refund would be issued for any overpayment of taxes. 

Once further guidance is issued by the IRS, you will want to talk to your tax advisor to see if this is a good option for you.

Leslie Mayo
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