Cases: Rosenfeld v. Commissioner, T.C. Memo. 2011-110
Final rules 1
(a) General rule In the case of any plan, there is hereby imposed a tax for the taxable year equal to 10 percent of the sum of—
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(1) any excess contributions under such plan for the plan year ending in such taxable year, and
Amended 1988
- 1988 Pub. L. 100-647 Pub. L. 100–647, § 1011(l)(8), struck out “a cash or deferred arrangement which is part of” after “contributions under”.
(2) any excess aggregate contributions under the plan for the plan year ending in such taxable year.
(b) Liability for tax The tax imposed by subsection (a) shall be paid by the employer.
(c) Excess contributions 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).
Amended 1988
- 1988 Pub. L. 100-647 Pub. L. 100–647, § 1011(l)(9), struck out “403(b),” and substituted “408(k)(6)(C)” for “408(k)(8)(B)”.
(d) Excess aggregate contribution 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).
Amended 1988
- 1988 Pub. L. 100-647 Pub. L. 100–647, § 1011(l)(10), inserted sentence at end relating to determination of excess aggregate contributions under certain annuity contracts.
(e) Plan For purposes of this section, the term “plan” means—
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(1) a plan described in section 401(a) which includes a trust exempt from tax under section 501(a),
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(2) any annuity plan described in section 403(a),
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(3) any annuity contract described in section 403(b),
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(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.
(f) No tax where excess distributed within specified period after close of year
Amended 2006
- 2006 Pub. L. 109-280 Pub. L. 109–280, § 902(e)(1)(B), substituted “specified period after” for “2½ months of” in heading.
(1) In general 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.
Amended 2006
- 2006 Pub. L. 109-280 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”.
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(2) Year of inclusion 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.
Amended 1988, 2006
- 2006 Pub. L. 109-280 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:
- 2006 “(A) In general.—Except as provided in subparagraph (B), 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.
- 2006 “(B) De minimis distributions.—If the total excess contributions and excess aggregate contributions distributed to a recipient under a plan for any plan year are less than $100, such distributions (and any income allocable thereto) shall be treated as earned and received by the recipient in his taxable year in which such distributions were made.”
- 1988 Pub. L. 100-647 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.”