Source: https://www.law.cornell.edu/uscode/text/26/4972?quicktabs_8=3
Timestamp: 2015-07-31 20:11:48
Document Index: 537457386

Matched Legal Cases: ['§ 4972', '§ 1131', '§ 1011', '§ 2005', '§ 755', '§ 1421', '§ 1507', '§ 616', '§ 404', '§ 114', '§ 803', '§ 2001', '§ 1906', '§ 312', '§ 103', '§ 491', '§ 237', '§ 803', '§ 114', '§ 408', '§ 652', '§ 404', '§ 652', '§ 652', '§ 408', '§ 652', '§ 637', '§ 652', '§ 637', '§ 652', '§ 637', '§ 616', '§ 652', '§ 637', '§ 653', '§ 1011', '§ 2005', '§ 1011', '§ 637', '§ 653', '§ 1507', '§ 755', '§ 637', '§ 1011']

26 U.S. Code § 4972 - Tax on nondeductible contributions to qualified employer plans | LII / Legal Information Institute
Tax imposed In the case of any qualified employer plan, there is hereby imposed a tax equal to 10 percent of the nondeductible contributions under the plan (determined as of the close of the taxable year of the employer).
Employer liable for tax The tax imposed by this section shall be paid by the employer making the contributions.
Nondeductible contributions For purposes of this section—
In general The term “nondeductible contributions” means, with respect to any qualified employer plan, the sum of—
Ordering rule for section 404 For purposes of paragraph (1), the amount allowable as a deduction under section 404 for any taxable year shall be treated as—
Contributions which may be returned to employer In determining the amount of nondeductible contributions for any taxable year, there shall not be taken into account any contribution for such taxable year which is distributed to the employer in a distribution described in section 4980
(c)(2)(B)(ii) if such distribution is made on or before the last day on which a contribution may be made for such taxable year under section 404
Special rule for self-employed individuals For purposes of paragraph (1), if—
the amount which is required to be contributed to a plan under section 412 on behalf of an individual who is an employee (within the meaning of section 401
(c)(1)), exceeds
Pre-1987 contributions The term “nondeductible contribution” shall not include any contribution made for a taxable year beginning before January 1, 1987.
Exceptions In determining the amount of nondeductible contributions for any taxable year, there shall not be taken into account—
so much of the contributions to 1 or more defined contribution plans which are not deductible when contributed solely because of section 404
(a)(7) as does not exceed the amount of contributions described in section 401
(m)(4)(A), or
so much of the contributions to a simple retirement account (within the meaning of section 408
(p)) or a simple plan (within the meaning of section 401
(k)(11)) which are not deductible when contributed solely because such contributions are not made in connection with a trade or business of the employer.
For purposes of subparagraph (A), the deductible limits under section 404
(a)(7) shall first be applied to amounts contributed to a defined benefit plan and then to amounts described in subparagraph (A). Subparagraph (B) shall not apply to contributions made on behalf of the employer or a member of the employer’s family (as defined in section 447
Defined benefit plan exception In determining the amount of nondeductible contributions for any taxable year, an employer may elect for such year not to take into account any contributions to a defined benefit plan except, in the case of a multiemployer plan, to the extent that such contributions exceed the full-funding limitation (as defined in section 431
(c)(6)). For purposes of this paragraph, the deductible limits under section 404
(a)(7) shall first be applied to amounts contributed to defined contribution plans and then to amounts described in this paragraph. If an employer makes an election under this paragraph for a taxable year, paragraph (6) shall not apply to such employer for such taxable year.
Qualified employer plan (A)
In general The term “qualified employer plan” means—
any plan meeting the requirements of section 401
any simplified employee pension (within the meaning of section 408
(k)), and
Exemption for governmental and tax exempt plans The term “qualified employer plan” does not include a plan described in subparagraph (A) or (B) of section 4980
Employer In the case of a plan which provides contributions or benefits for employees some or all of whom are self-employed individuals within the meaning of section 401
(c)(1), the term “employer” means the person treated as the employer under section 401
(Added Pub. L. 99–514, title XI, § 1131(c)(1),Oct. 22, 1986, 100 Stat. 2477; amended Pub. L. 100–647, title I, § 1011A(e)(1), (2), title II, § 2005(a)(1),Nov. 10, 1988, 102 Stat. 3477, 3610; Pub. L. 103–465, title VII, § 755(a),Dec. 8, 1994, 108 Stat. 5023; Pub. L. 104–188, title I, § 1421(b)(9)(D),Aug. 20, 1996, 110 Stat. 1798; Pub. L. 105–34, title XV, § 1507(a),Aug. 5, 1997, 111 Stat. 1067; Pub. L. 107–16, title VI, §§ 616(b)(2)(B), 637(a), (b), 652
(b), 653(a),June 7, 2001, 115 Stat. 103, 118, 130; Pub. L. 108–311, title IV, §§ 404(c), 408
(b)(9),Oct. 4, 2004, 118 Stat. 1188, 1193; Pub. L. 109–280, title I, § 114(e)(5), title VIII, § 803(c),Aug. 17, 2006, 120 Stat. 855, 996.)
A prior section, added Pub. L. 93–406, title II, § 2001(f)(1),Sept. 2, 1974, 88 Stat. 955; amended Pub. L. 94–455, title XIX, § 1906(b)(13)(A),Oct. 4, 1976, 90 Stat. 1834; Pub. L. 97–34, title III, § 312(e)(3),Aug. 13, 1981, 95 Stat. 285; Pub. L. 97–448, title I, § 103(c)(10)(B),Jan. 12, 1983, 96 Stat. 2377; Pub. L. 98–369, div. A, title IV, § 491(d)(40),July 18, 1984, 98 Stat. 851, related to tax on excess contributions for self-employed individuals, prior to repeal applicable to years beginning after Dec. 31, 1983, by Pub. L. 97–248, title II, § 237(c)(1),Sept. 3, 1982, 96 Stat. 511.
2006—Subsec. (c)(6)(A). Pub. L. 109–280, § 803(c), amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “so much of the contributions to 1 or more defined contribution plans which are not deductible when contributed solely because of section 404
(a)(7) as does not exceed the greater of—
“(i) the amount of contributions not in excess of 6 percent of compensation (within the meaning of section 404
(a) and as adjusted under section 404
(a)(12)) paid or accrued (during the taxable year for which the contributions were made) to beneficiaries under the plans, or
“(ii) the amount of contributions described in section 401
(m)(4)(A), or”.
Subsec. (c)(7). Pub. L. 109–280, § 114(e)(5), substituted “except, in the case of a multiemployer plan, to the extent that such contributions exceed the full-funding limitation (as defined in section 431
(c)(6))” for “except to the extent that such contributions exceed the full-funding limitation (as defined in section 412
(c)(7), determined without regard to subparagraph (A)(i)(I) thereof)”.
2004—Subsec. (c)(6). Pub. L. 108–311, § 408(b)(9), amended directory language of Pub. L. 107–16, § 652(b)(3). See 2001 Amendment note below.
Subsec. (c)(6)(A)(ii). Pub. L. 108–311, § 404(c), amended cl. (ii) generally. Prior to amendment, cl. (ii) read as follows: “the sum of—
“(I) the amount of contributions described in section 401
(m)(4)(A), plus
“(II) the amount of contributions described in section 402
(g)(3)(A), or”.
2001—Subsec. (c)(6). Pub. L. 107–16, § 652(b)(4), substituted “Subparagraph (B)” for “Subparagraph (C)” in concluding provisions.
Pub. L. 107–16, § 652(b)(3), as amended by Pub. L. 108–311, § 408(b)(9), substituted “subparagraph (A)” for “subparagraph (B)” in two places in concluding provisions.
Pub. L. 107–16, § 652(b)(2), in concluding provisions, struck out first sentence which read as follows: “If 1 or more defined benefit plans were taken into account in determining the amount allowable as a deduction under section 404 for contributions to any defined contribution plan, subparagraph (B) shall apply only if such defined benefit plans are described in section 404
(a)(1)(D).”
Pub. L. 107–16, § 637(b), in concluding provisions, inserted at end “Subparagraph (C) shall not apply to contributions made on behalf of the employer or a member of the employer’s family (as defined in section 447
Subsec. (c)(6)(A). Pub. L. 107–16, § 652(b)(1), redesignated subpar. (B) as (A) and struck out former subpar. (A) which read as follows: “contributions that would be deductible under section 404
(a)(1)(D) if the plan had more than 100 participants if—
Pub. L. 107–16, § 637(a), struck out “and” at end.
Subsec. (c)(6)(B). Pub. L. 107–16, § 652(b)(1), redesignated subpar. (C) as (B). Former subpar. (B) redesignated (A).
Pub. L. 107–16, § 637(a), substituted “, or” for period at end.
Subsec. (c)(6)(B)(i). Pub. L. 107–16, § 616(b)(2)(B), substituted “(within the meaning of section 404
(a)(12))” for “(within the meaning of section 404
Subsec. (c)(6)(C). Pub. L. 107–16, § 652(b)(1), redesignated subpar. (C) as (B).
Pub. L. 107–16, § 637(a), added subpar. (C).
Subsec. (c)(7). Pub. L. 107–16, § 653(a), added par. (7).
1997—Subsec. (c)(6)(B). Pub. L. 105–34amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “contributions to 1 or more defined contribution plans which are not deductible when contributed solely because of section 404
(a)(7), but only to the extent such contributions do not exceed 6 percent of compensation (within the meaning of section 404
(a)) paid or accrued (during the taxable year for which the contributions were made) to beneficiaries under the plans.”
1996—Subsec. (d)(1)(A)(iv). Pub. L. 104–188added cl. (iv).
1994—Subsec. (c)(6). Pub. L. 103–465added par. (6).
1988—Subsec. (c). Pub. L. 100–647, § 1011A(e)(1), amended subsec. (c) generally, revising and restating as pars. (1) to (4) provisions of former pars. (1) and (2).
Subsec. (c)(4), (5). Pub. L. 100–647, § 2005(a)(1), added par. (4) and redesignated former par. (4) as (5).
Subsec. (d)(1). Pub. L. 100–647, § 1011A(e)(2), amended par. (1) generally. Prior to amendment, par. (1) read as follows: “The term ‘qualified employer plan’ means—
“(A) any plan meeting the requirements of section 401
(a) which includes a trust exempt from the tax under section 501
“(B) an annuity plan described in section 403
“(C) any simplified employee pension (within the meaning of section 408
Amendment by section 114(e)(5) ofPub. L. 109–280applicable to taxable years beginning after 2007, but only with respect to plan years beginning after 2007 which end with or within any such taxable year, see section 114(g) ofPub. L. 109–280, as added by Pub. L. 110–458, set out as a note under section 401 of this title.
Amendment by section 803(c) ofPub. L. 109–280applicable to contributions for taxable years beginning after Dec. 31, 2005, see section 803(d) ofPub. L. 109–280, set out as a note under section 404 of this title.
Amendment by section 404(c) ofPub. L. 108–311effective as if included in the provision of Pub. L. 107–16to which such amendment relates, see section 404(f) ofPub. L. 108–311, set out as a note under section 45A of this title.
Amendment by section 616(b)(2)(B) ofPub. L. 107–16applicable to years beginning after Dec. 31, 2001, see section 616(c) ofPub. L. 107–16, set out as a note under section 404 of this title.
Pub. L. 107–16, title VI, § 637(d),June 7, 2001, 115 Stat. 118, provided that: “The amendments made by this section [amending this section] shall apply to taxable years beginning after December 31, 2001.”
Amendment by section 652(b) ofPub. L. 107–16applicable to plan years beginning after Dec. 31, 2001, see section 652(c) ofPub. L. 107–16, set out as a note under section 404 of this title.
Pub. L. 107–16, title VI, § 653(b),June 7, 2001, 115 Stat. 130, provided that: “The amendment made by this section [amending this section] shall apply to years beginning after December 31, 2001.”
Pub. L. 105–34, title XV, § 1507(b),Aug. 5, 1997, 111 Stat. 1067, provided that: “The amendments made by this section [amending this section] shall apply to taxable years beginning after December 31, 1997.”
Amendment by Pub. L. 104–188applicable to taxable years beginning after Dec. 31, 1996, see section 1421(e) ofPub. L. 104–188, set out as a note under section 72 of this title.
Pub. L. 103–465, title VII, § 755(b),Dec. 8, 1994, 108 Stat. 5024, provided that:
“(1) Section 4972
(c)(6)(a).—Section 4972(c)(6)(A) of the Internal Revenue Code of 1986 (as added by this section) shall apply to taxable years ending on or after the date of enactment of this Act [Dec. 8, 1994].
“(2) Section 4972
(c)(6)(b).—Section 4972(c)(6)(B) of such Code (as added by this section) shall apply to taxable years ending on or after December 31, 1992.”
Amendment by section 1011A(e)(1), (2) ofPub. L. 100–647effective, 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) ofPub. L. 100–647, set out as a note under section 1 of this title.
Amendment by section 2005(a)(1) ofPub. L. 100–647effective as if included in the amendment made by section 1131(c) ofPub. L. 99–514, see section 2005(e) ofPub. L. 100–647, as amended, set out as a note under section 404 of this title.
Section applicable to taxable years beginning after Dec. 31, 1986, with special rules in case of plans maintained pursuant to collective bargaining agreements, see section 1131(d) ofPub. L. 99–514, as amended, set out as an Effective Date of 1986 Amendment note under section 404 of this title.
Pub. L. 107–16, title VI, § 637(c),June 7, 2001, 115 Stat. 118, provided that: “Nothing in the amendments made by this section [amending this section] shall be construed to infer the proper treatment of nondeductible contributions under the laws in effect before such amendments.”
Pub. L. 100–647, title I, § 1011A(e)(5),Nov. 10, 1988, 102 Stat. 3478, provided that: “In the case of any taxable year beginning in 1987, the amount under section 4972(c)(1)(A)(ii) of the 1986 Code for a plan to which title IV of the Employee Retirement Income Security Act of 1974 [29 U.S.C. 1301 et seq.] applies shall be increased by the amount (if any) by which, as of the close of the plan year with or within which such taxable year begins—
“(A) the liabilities of such plan (determined as if the plan had terminated as of such time), exceed
“(B) the assets of such plan.”