
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 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.
