§ 4979. — Tax on certain excess contributions.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 26USC4979]
TITLE 26--INTERNAL REVENUE CODE
Subtitle D--Miscellaneous Excise Taxes
CHAPTER 43--QUALIFIED PENSION, ETC., PLANS
Sec. 4979. Tax on certain excess contributions
(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--
(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.
(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).
(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).
(e) Plan
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.
(f) No tax where excess distributed within 2\1/2\ months of close of
year
(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) is distributed (or, if forfeitable, is forfeited) before
the close of the first 2\1/2\ months of the following plan year.
(2) Year of inclusion
(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.
(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.
(Added Pub. L. 99-514, title XI, Sec. 1117(b)(1), Oct. 22, 1986, 100
Stat. 2461; amended Pub. L. 100-647, title I, Sec. 1011(l)(8)-(11), Nov.
10, 1988, 102 Stat. 3470, 3471.)
Amendments
1988--Subsec. (a)(1). Pub. L. 100-647, Sec. 1011(l)(8), struck out
``a cash or deferred arrangement which is part of'' after
``contributions under''.
Subsec. (c). Pub. L. 100-647, Sec. 1011(l)(9), struck out
``403(b),'' and substituted ``408(k)(6)(C)'' for ``408(k)(8)(B)''.
Subsec. (d). Pub. L. 100-647, Sec. 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, Sec. 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.''
Effective Date of 1988 Amendment
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.
Effective Date
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.
Regulations
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.
Plan Amendments Not Required Until January 1, 1989
For provisions directing that if any amendments made by subtitle A
or subtitle C of title XI [Secs. 1101-1147 and 1171-1177] or title XVIII
[Secs. 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.
Section Referred to in Other Sections
This section is referred to in sections 401, 408, 501 of this title.
