### Question
Can you define what parachute payment means?


### Answer
**Parachute payment** is defined as the following in *26 U.S.C. § 4960*:

> any payment in the nature of compensation to (or for the benefit of) a covered employee if—


(i) such payment is contingent on such employee's separation from employment with the employer, and


(ii) the aggregate present value of the payments in the nature of compensation to (or for the benefit of) such individual which are contingent on such separation equals or exceeds an amount equal to 3 times the base amount

#### Citation:
  - *26 U.S.C. § 4960*
  - Heading: **Subtitle D-Miscellaneous Excise Taxes > CHAPTER 42-PRIVATE FOUNDATIONS; AND CERTAIN OTHER TAX-EXEMPT ORGANIZATIONS > Subchapter D-Failure by Certain Charitable Organizations To Meet Certain Qualification Requirements**

