In the case of any plan, there is hereby imposed a tax for the taxable year equal to 10 percent of the sum of—
(1) any excess contributions under such plan for the plan year ending in such taxable year, and
(2) any excess aggregate contributions under the plan for the plan year ending in such taxable year.
The tax imposed by subsection (a) shall be paid by the employer.
For purposes of this section, the term "excess contributions" has the meaning given such term by sections 401(k)(8)(B), 408(k)(6)(C), and 501(c)(18).
For purposes of this section, the term "excess aggregate contribution" has the meaning given to such term by section 401(m)(6)(B). For purposes of determining excess aggregate contributions under an annuity contract described in section 403(b), such contract shall be treated as a plan described in subsection (e)(1).
For purposes of this section, the term "plan" means—
(1) a plan described in section 401(a) which includes a trust exempt from tax under section 501(a),
(2) any annuity plan described in section 403(a),
(3) any annuity contract described in section 403(b),
(4) a simplified employee pension of an employer which satisfies the requirements of section 408(k), and
(5) a plan described in section 501(c)(18).
Such term includes any plan which, at any time, has been determined by the Secretary to be such a plan.
No tax shall be imposed under this section on any excess contribution or excess aggregate contribution, as the case may be, to the extent such contribution (together with any income allocable thereto through the end of the plan year for which the contribution was made) is distributed (or, if forfeitable, is forfeited) before the close of the first 2½ months (6 months in the case of an excess contribution or excess aggregate contribution to an eligible automatic contribution arrangement (as defined in section 414(w)(3))) of the following plan year.
Any amount distributed as provided in paragraph (1) shall be treated as earned and received by the recipient in the recipient's taxable year in which such distributions were made.
(Added Pub. L. 99–514, title XI, §1117(b)(1), Oct. 22, 1986, 100 Stat. 2461; amended Pub. L. 100–647, title I, §1011(l)(8)–(11), Nov. 10, 1988, 102 Stat. 3470, 3471; Pub. L. 109–280, title IX, §902(e)(1)–(3)(A), Aug. 17, 2006, 120 Stat. 1038.)
2006—Subsec. (f). Pub. L. 109–280, §902(e)(1)(B), substituted "specified period after" for "2½ months of" in heading.
Subsec. (f)(1). Pub. L. 109–280, §902(e)(1)(A), (3)(A), inserted "through the end of the plan year for which the contribution was made" after "thereto" and "(6 months in the case of an excess contribution or excess aggregate contribution to an eligible automatic contribution arrangement (as defined in section 414(w)(3)))" after "2½ months".
Subsec. (f)(2). Pub. L. 109–280, §902(e)(2), reenacted heading without change and amended text of par. (2) generally. Prior to amendment, text read as follows:
"(A)
"(B)
1988—Subsec. (a)(1). Pub. L. 100–647, §1011(l)(8), struck out "a cash or deferred arrangement which is part of" after "contributions under".
Subsec. (c). Pub. L. 100–647, §1011(l)(9), struck out "403(b)," and substituted "408(k)(6)(C)" for "408(k)(8)(B)".
Subsec. (d). Pub. L. 100–647, §1011(l)(10), inserted sentence at end relating to determination of excess aggregate contributions under certain annuity contracts.
Subsec. (f)(2). Pub. L. 100–647, §1011(l)(11), substituted "Year of inclusion" for "Included in prior year" as heading, and amended text generally. Prior to amendment, text read as follows: "Any amount distributed as provided in paragraph (1) shall be treated as received and earned by the recipient in his taxable year for which such contribution was made."
Amendment by Pub. L. 109–280 applicable to plan years beginning after Dec. 31, 2007, see section 902(g) of Pub. L. 109–280, set out as a note under section 401 of this title.
Amendment by Pub. L. 100–647 effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, Pub. L. 99–514, to which such amendment relates, see section 1019(a) of Pub. L. 100–647, set out as a note under section 1 of this title.
Section applicable to plan years beginning after Dec. 31, 1986, with special provisions for plans maintained pursuant to collective bargaining agreements ratified before Mar. 1, 1986, and for annuity contracts under section 403(b) of this title, see section 1117(d) of Pub. L. 99–514, set out as an Effective Date of 1986 Amendment note under section 401 of this title.
Secretary of the Treasury or his delegate to issue before Feb. 1, 1988, final regulations to carry out this section, see section 1141 of Pub. L. 99–514, set out as a note under section 401 of this title.
For provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§1101–1147 and 1171–1177] or title XVIII [§§1800–1899A] of Pub. L. 99–514 require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after Jan. 1, 1989, see section 1140 of Pub. L. 99–514, as amended, set out as a note under section 401 of this title.
| § 54.4979-0 | Excise tax on certain excess contributions and excess aggregate contributions; table of contents |
| § 54.4979-1 | Excise tax on certain excess contributions and excess aggregate contributions |
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