### Question
Can you define what nonqualified deferred compensation plan means?


### Answer
**Nonqualified deferred compensation plan** is defined as the following in *26 U.S.C. § 457A*:

> given such term under section 409A(d), except that such term shall include any plan that provides a right to compensation based on the appreciation in value of a specified number of equity units of the service recipient.

#### Citation:
  - *26 U.S.C. § 457A*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter E-Accounting Periods and Methods of Accounting > PART II-METHODS OF ACCOUNTING > Subpart B-Taxable Year for Which Items of Gross Income Included**

