# § 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—
Such term includes any plan which, at any time, has been determined by the Secretary to be such a plan.
**(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).
**(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 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.
**(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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**Source Credit**: (Added Pub. L. 99–514, title XI, § 1117(b)(1), Oct. 22, 1986, 100 Stat. 2461; amended Pub. L. 100–647, title I, § 1011(*l*)(8)–(11), Nov. 10, 1988, 102 Stat. 3470, 3471; Pub. L. 109–280, title IX, § 902(e)(1)–(3)(A), Aug. 17, 2006, 120 Stat. 1038.)
## Editorial Notes
### Amendments
2006—Subsec. (f). , substituted “specified period after” for “2½ months of” in heading.
Subsec. (f)(1). , (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”.
Subsec. (f)(2). , reenacted heading without change and amended text of par. (2) generally. Prior to amendment, text read as follows:
“(A) .—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) .—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—Subsec. (a)(1). ()(8), struck out “a cash or deferred arrangement which is part of” after “contributions under”.
Subsec. (c). ()(9), struck out “403(b),” and substituted “408(k)(6)(C)” for “408(k)(8)(B)”.
Subsec. (d). ()(10), inserted sentence at end relating to determination of excess aggregate contributions under certain annuity contracts.
Subsec. (f)(2). ()(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.”
## Statutory Notes and Related Subsidiaries
### Effective Date of 2006 Amendment
Amendment by applicable to plan years beginning after , see , set out as a note under .
### Effective Date of 1988 Amendment
Amendment by effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, , to which such amendment relates, see , set out as a note under .
### Effective Date
Section applicable to plan years beginning after , with special provisions for plans maintained pursuant to collective bargaining agreements ratified before , and for annuity contracts under , see , set out as an Effective Date of 1986 Amendment note under .
### Regulations
Secretary of the Treasury or his delegate to issue before , final regulations to carry out this section, see , set out as a note under .
### 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 [§§ 1101–1147 and 1171–1177] or title XVIII [§§ 1800–1899A] of 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 , see , as amended, set out as a note under .