Amended 1983
- 1983 Pub. L. 98-21 Pub. L. 98–21, § 321(e)(2)(D)(i), substituted “Employees of foreign affiliates covered by section 3121(l) agreements” for “Certain employees of foreign subsidiaries” in section catchline.
(a) Treatment as employees of American employer For purposes of applying this part with respect to a pension, profit-sharing, or stock bonus plan described in section 401(a) or an annuity plan described in section 403(a), of an American employer (as defined in section 3121(h)), an individual who is a citizen or resident of the United States and who is an employee of a foreign affiliate (as defined in section 3121(l)(6)) of such American employer shall be treated as an employee of such American employer, if—
Amended 1983, 1984, 1989
- 1989 Pub. L. 101-239 Pub. L. 101–239, § 10201(b)(1), substituted “3121(l)(6)” for “3121(l)(8)”.
- 1984 Pub. L. 98-369 Pub. L. 98–369, § 491(d)(13), substituted in introductory provision “or an annuity plan described in section 403(a)” for “, an annuity plan described in section 403(a), or a bond purchase plan described in section 405(a)”.
- 1983 Pub. L. 98-21 Pub. L. 98–21, § 321(c), amended subsec. (a) generally, substituting “American employer” for “domestic corporation” in heading and in text wherever appearing, inserting reference to section 3121(h) of this title, inserting “or resident” after “citizen” wherever appearing, substituting “foreign affiliate” for “foreign subsidiary” wherever appearing, and “foreign affiliates” for “foreign subsidiaries”.
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(1) such American employer has entered into an agreement under section 3121(l) which applies to the foreign affiliate of which such individual is an employee;
(2) the plan of such American employer expressly provides for contributions or benefits for individuals who are citizens or residents of the United States and who are employees of its foreign affiliates to which an agreement entered into by such American employer under section 3121(l) applies; and
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(3) contributions under a funded plan of deferred compensation (whether or not a plan described in section 401(a) or 403(a)) are not provided by any other person with respect to the remuneration paid to such individual by the foreign affiliate.
Amended 1984
- 1984 Pub. L. 98-369 Pub. L. 98–369, § 491(d)(14), substituted “or 403(a)” for “, 403(a), or 405(a)”.
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(b) Special rules for application of section 401(a)
Amended 1983
- 1983 Pub. L. 98-21 Pub. L. 98–21, § 321(e)(2)(A), substituted reference to an American employer for reference to a domestic corporation, and reference to an affiliate for reference to a subsidiary, wherever appearing.
(1) Nondiscrimination requirements For purposes of applying section 401(a)(4) and section 410(b) with respect to an individual who is treated as an employee of an American employer under subsection (a)—
Amended 1974, 1986
- 1986 Pub. L. 99-514 Pub. L. 99–514, § 1112(d)(3), struck out “(without regard to paragraph (1)(A) thereof)” after “section 410(b)” in introductory text.
- 1974 Pub. L. 93-406 Pub. L. 93–406, § 1016(a)(4), substituted “section 401(a)(4) and section 410(b) (without regard to paragraph (1)(A) thereof)” for “paragraphs (3)(B) and (4) of section 401(a)”.
(A) if such individual is a highly compensated employee (within the meaning of section 414(q)), he shall be treated as having such capacity with respect to such American employer; and
Amended 1986, 1989
- 1989 Pub. L. 101-239 Pub. L. 101–239, § 7831(f), made technical correction to Pub. L. 99–514, § 1114(b)(9)(A), see 1986 Amendment note below.
- 1986 Pub. L. 99-514 Pub. L. 99–514, § 1114(b)(9)(A), as amended by Pub. L. 101–239, § 7831(f), substituted “a highly compensated employee (within the meaning of section 414(q))” for “an officer, shareholder, or person whose principal duties consist in supervising the work of other employees of a foreign affiliate of such American employer”.
(B) the determination of whether such individual is a highly compensated employee (as so defined) shall be made by treating such individual’s total compensation (determined with the application of paragraph (2) of this subsection) as compensation paid by such American employer and by determining such individual’s status with regard to such American employer.
Amended 1986
- 1986 Pub. L. 99-514 Pub. L. 99–514, § 1114(b)(9)(C), inserted “(as so defined)” after “employee”.
(2) Determination of compensation For purposes of applying paragraph (5) of section 401(a) with respect to an individual who is treated as an employee of an American employer under subsection (a)—
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(A) the total compensation of such individual shall be the remuneration paid to such individual by the foreign affiliate which would constitute his total compensation if his services had been performed for such American employer, and the basic or regular rate of compensation of such individual shall be determined under regulations prescribed by the Secretary; and
Amended 1976
- 1976 Pub. L. 94-455 Pub. L. 94–455 struck out “or his delegate” after “Secretary”.
(B) such individual shall be treated as having paid the amount paid by such American employer which is equivalent to the tax imposed by section 3101.
[(c) Repealed. Pub. L. 104–188, title I, § 1401(b)(7), Aug. 20, 1996, 110 Stat. 1789]
Amended 1969, 1974, 1983, 1988, 1989, 1992, 1996
- 1996 Pub. L. 104-188 Pub. L. 104–188, § 1401(b)(7), struck out subsec. (c) which related to treatment of termination of status as deemed employee.
- 1992 Pub. L. 102-318 Pub. L. 102–318 substituted “402(d)” for “402(e)”.
- 1989 Pub. L. 101-239 Pub. L. 101–239, § 7811(g)(3), substituted “purposes of limitation” for “purposes limitation” in heading.
- 1989 Pub. L. 101-239 Pub. L. 101–239, § 10201(b)(2), substituted “3121(l)(6)(B)” for “3121(l)(8)(B)”.
- 1988 Pub. L. 100-647 Pub. L. 100–647, § 1011A(b)(16), struck out “of capital gain provisions and” after “service for purposes” in heading and substituted “applying section 402(e)” for “applying subsections (a)(2) and (e) of section 402, and section 403(a)(2)” in text.
- 1983 Pub. L. 98-21 Pub. L. 98–21, § 321(e)(2)(A), substituted reference to an American employer for reference to a domestic corporation, and reference to an affiliate for reference to a subsidiary, wherever appearing in provisions preceding par. (1) and in pars. (1) and (2).
- 1983 Pub. L. 98-21 Pub. L. 98–21, § 321(e)(2)(A), (B), substituted “foreign affiliate by reason of which he is treated as an employee of such American employer, if he becomes an employee of another entity in which such American employer has not less than a 10-percent interest (within the meaning of section 3121(l)(8)(B)” for “foreign subsidiary by reason of which he is treated as an employee of such domestic corporation, if he becomes an employee of another corporation controlled by such domestic corporation”.
- 1974 Pub. L. 93-406 Pub. L. 93–406, § 2005(c)(12), substituted “subsections (a)(2) and (e) of section 402” for “section 72(n), section 402(a)(2)”.
- 1969 Pub. L. 91-172 Pub. L. 91–172 substituted “provisions and limitation of tax” for “provisions” in heading, and substituted “section 72(n), section 402(a)(2),” for “section 402(a)(2)” in text.
(d) Deductibility of contributions For purposes of applying section 404 with respect to contributions made to or under a pension, profit-sharing, stock bonus, or annuity plan by an American employer, or by another taxpayer which is entitled to deduct its contributions under section 404(a)(3)(B), on behalf of an individual who is treated as an employee of such American employer under subsection (a)—
Amended 1983, 1984
- 1984 Pub. L. 98-369 Pub. L. 98–369, § 491(d)(15)(A), (B), substituted in introductory provision “section 404” for “sections 404 and 405(c)”, and “or annuity” for “annuity, or bond purchase”.
- 1983 Pub. L. 98-21 Pub. L. 98–21, § 321(e)(2)(A), (C), substituted references to an American employer for references to a domestic corporation and reference to an affiliate for a reference to a subsidiary wherever appearing, substituted “another taxpayer” for “another corporation” in provisions preceding par. (1), and substituted “any other taxpayer” for “any other corporation” in par. (1).
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(1) except as provided in paragraph (2), no deduction shall be allowed to such American employer or to any other taxpayer which is entitled to deduct its contributions under such sections,
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(2) there shall be allowed as a deduction to the foreign affiliate of which such individual is an employee an amount equal to the amount which (but for paragraph (1)) would be deductible under section 404 by the American employer if he were an employee of the American employer, and
Amended 1984
- 1984 Pub. L. 98-369 Pub. L. 98–369, § 491(d)(15)(C), struck out “(or section 405(c))” after “section 404”.
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(3) any reference to compensation shall be considered to be a reference to the total compensation of such individual (determined with the application of subsection (b)(2)).
Any amount deductible by a foreign affiliate under this subsection shall be deductible for its taxable year with or within which the taxable year of such American employer ends.
(e) Treatment as employee under related provisions An individual who is treated as an employee of an American employer under subsection (a) shall also be treated as an employee of such American employer, with respect to the plan described in subsection (a)(2), for purposes of applying the following provisions of this title:
Amended 1983, 1986, 1988, 1996
- 1996 Pub. L. 104-188 Pub. L. 104–188, § 1402(b)(2), redesignated par. (3) as (2) and struck out former par. (2) which read as follows: “Section 101(b) (relating to employees’ death benefits).”
- 1988 Pub. L. 100-647 Pub. L. 100–647, § 1011A(b)(1)(C), redesignated pars. (2) to (4) as (1) to (3), respectively, and struck out former par. (1) which read as follows: “Section 72(d) (relating to employees’ annuities).”
- 1986 Pub. L. 99-514 Pub. L. 99–514, § 1852(e)(2)(C), struck out par. (5) which read as follows: “Section 2517 (relating to certain annuities under qualified plans).”
- 1983 Pub. L. 98-21 Pub. L. 98–21, § 321(e)(2)(A), substituted reference to an American employer for reference to a domestic corporation wherever appearing in provisions preceding par. (1).
(1) Section 72(f) (relating to special rules for computing employees’ contributions).
(2) Section 2039 (relating to annuities).
Amended 1996
- 1996 Pub. L. 104-188 Pub. L. 104–188, § 1402(b)(2), redesignated par. (3) as (2) and struck out former par. (2) which read as follows: “Section 101(b) (relating to employees’ death benefits).”