A retired Mary Kay consultant owes self-employment tax on deferred pay that she got after she retired.
During her tenure with the company, she was treated as an independent contractor and was compensated with commissions. The payments that she received under the company’s post-retirement program, which was classified as a nonqualified deferred compensation plan for tax purposes, were based on a percentage of commissions from sales that she helped develop.
She stated the payments were from the sale of her Mary Kay business. But the Tax Court ruled they’re deferred pay subject to SECA tax
Dunlap, TC Summ. Op. 2020-10