§ 4979

§ 4979. Tax on certain excess contributions

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(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 specified period after 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 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 21/2 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.

(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.

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