Internal Revenue Code:Sec. 404. Deduction for contributions of an employer to an employees' trust or annuity plan and compensation under a deferred-payment plan
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Location in Internal Revenue Code
TITLE 26 - INTERNAL REVENUE CODE
Subtitle A - Income Taxes
CHAPTER 1 - NORMAL TAXES AND SURTAXES
Subchapter D - Deferred Compensation, Etc.
PART I - PENSION, PROFIT-SHARING, STOCK BONUS PLANS, ETC.
Subpart A - General Rule
Statute
Sec. 404. Deduction for contributions of an employer to an
employees' trust or annuity plan and compensation under a
deferred-payment plan
(a) General rule
If contributions are paid by an employer to or under a stock
bonus, pension, profit-sharing, or annuity plan, or if compensation
is paid or accrued on account of any employee under a plan
deferring the receipt of such compensation, such contributions or
compensation shall not be deductible under this chapter; but, if
they would otherwise be deductible, they shall be deductible under
this section, subject, however, to the following limitations as to
the amounts deductible in any year:
(1) Pension trusts
(A) In general
In the taxable year when paid, if the contributions are paid
into a pension trust (other than a trust to which paragraph (3)
applies), and if such taxable year ends within or with a
taxable year of the trust for which the trust is exempt under
section 501(a) in the case of a defined benefit plan other
than a multiemployer plan, in an amount determined under
subsection (o), and in the case of any
other plan, in an amount determined as follows:
(i) the amount necessary to satisfy the minimum funding
standard provided by section 412(a) for plan years ending
within or with such taxable year (or for any prior plan
year), if such amount is greater than the amount determined
under clause (ii) or (iii) (whichever is applicable with
respect to the plan),
(ii) the amount necessary to provide with respect to all of
the employees under the trust the remaining unfunded cost of
their past and current service credits distributed as a level
amount, or a level percentage of compensation, over the
remaining future service of each such employee, as determined
under regulations prescribed by the Secretary, but if such
remaining unfunded cost with respect to any 3 individuals is
more than 50 percent of such remaining unfunded cost, the
amount of such unfunded cost attributable to such individuals
shall be distributed over a period of at least 5 taxable
years,
(iii) an amount equal to the normal cost of the plan, as
determined under regulations prescribed by the Secretary,
plus, if past service or other supplementary pension or
annuity credits are provided by the plan, an amount necessary
to amortize the unfunded costs attributable to such credits
in equal annual payments (until fully amortized) over 10
years, as determined under regulations prescribed by the
Secretary.
In determining the amount deductible in such year under the
foregoing limitations the funding method and the actuarial
assumptions used shall be those used for such year under
section 431, and the maximum amount deductible for such year
shall be an amount equal to the full funding limitation for
such year determined under section 431.
(B) Special rule in case of certain amendments
In the case of a multiemployer plan which the Secretary of Labor
finds to be collectively bargained which makes an election under this
subparagraph (in such manner and at such time as may be
provided under regulations prescribed by the Secretary), if the
full funding limitation determined under section 431(c)(6) for
such year is zero, if as a result of any plan amendment
applying to such plan year, the amount determined under section
431(c)(6)(A)(ii) exceeds the amount determined under section
431(c)(6)(A)(i), and if the funding method and the actuarial
assumptions used are those used for such year under section
431, the maximum amount deductible in such year under the
limitations of this paragraph shall be an amount equal to the
lesser of -
(i) the full funding limitation for such year determined by
applying section 412(c)(7) but increasing the amount referred
to in subparagraph (A) thereof by the decrease in the present
value of all unamortized liabilities resulting from such
amendment, or
(ii) the normal cost under the plan reduced by the amount
necessary to amortize in equal annual installments over 10
years (until fully amortized) the decrease described in
clause (i).
In the case of any election under this subparagraph, the amount
deductible under the limitations of this paragraph with respect
to any of the plan years following the plan year for which such
election was made shall be determined as provided under such
regulations as may be prescribed by the Secretary to carry out
the purposes of this subparagraph.
(C) Certain collectively-bargained plans
In the case of a plan which the Secretary of Labor finds to
be collectively bargained, established or maintained by an
employer doing business in not less than 40 States and engaged
in the trade or business of furnishing or selling services
described in section 168(i)(10)(C), with respect to which the
rates have been established or approved by a State or political
subdivision thereof, by any agency or instrumentality of the
United States, or by a public service or public utility
commission or other similar body of any State or political
subdivision thereof, and in the case of any employer which is a
member of a controlled group with such employer, subparagraph
(B) shall be applied by substituting for the words ''plan
amendment'' the words ''plan amendment or increase in benefits
payable under title II of the Social Security Act''. For the
purposes of this subparagraph, the term ''controlled group''
has the meaning provided by section 1563(a), determined without
regard to section 1563(a)(4) and (e)(3)(C).
(D) Amount determined on basis of unfunded current
liability.--In the case of a defined benefit plan which
is a multiemployer plan, except as provided in
regulations, the maximum amount deductible under the
limitations of this paragraph shall not be less than the
excess (if any) of--
(i) 140 percent of the current liability of
the plan determined under section 431(c)(6)(C), over
(ii) the value of the plan's assets
determined under section 431(c)(2).
(E) Carryover
Any amount paid in a taxable year in excess of the amount
deductible in such year under the foregoing limitations shall
be deductible in the succeeding taxable years in order of time
to the extent of the difference between the amount paid and
deductible in each such succeeding year and the maximum amount
deductible for such year under the foregoing limitations.
(2) Employees' annuities
In the taxable year when paid, in an amount determined in
accordance with paragraph (1), if the contributions are paid
toward the purchase of retirement annuities, or retirement
annuities and medical benefits as described in section 401(h),
and such purchase is part of a plan which meets the requirements
of section 401(a)(3), (4), (5), (6), (7), (8), (9), (11), (12),
(13), (14), (15), (16), (17), (FOOTNOTE 1) (19), (20), (22),
(26), (27), and (31) and, if applicable, the requirements of
section 401(a)(10) and of section 401(d), and if refunds of
premiums, if any, are applied within the current taxable year or
next succeeding taxable year toward the purchase of such
retirement annuities, or such retirement annuities and medical
benefits.
(FOOTNOTE 1) See References in Text note below.
(3) Stock bonus and profit-sharing trusts
(A) Limits on deductible contributions
(i) In general
In the taxable year when paid, if the contributions are
paid into a stock bonus or profit-sharing trust, and if such
taxable year ends within or with a taxable year of the trust
with respect to which the trust is exempt under section
501(a), in an amount not in excess of the greater of -
(I) 25 percent of the compensation otherwise paid or
accrued during the taxable year to the beneficiaries under
the stock bonus or profit-sharing plan, or
(II) the amount such employer is required to contribute
to such trust under section 401(k)(11) for such year.
(ii) Carryover of excess contributions
Any amount paid into the trust in any taxable year in
excess of the limitation of clause (i) (or the corresponding
provision of prior law) shall be deductible in the succeeding
taxable years in order of time, but the amount so deductible
under this clause in any 1 such succeeding taxable year
together with the amount allowable under clause (i) shall not
exceed the amount described in subclause (I) or (II) of
clause (i), whichever is greater, with respect to such
taxable year.
(iii) Certain retirement plans excluded
For purposes of this subparagraph, the term ''stock bonus
or profit-sharing trust'' shall not include any trust
designed to provide benefits upon retirement and covering a
period of years, if under the plan the amounts to be
contributed by the employer can be determined actuarially as
provided in paragraph (1).
(iv) 2 or more trusts treated as 1 trust
If the contributions are made to 2 or more stock bonus or
profit-sharing trusts, such trusts shall be considered a
single trust for purposes of applying the limitations in this
subparagraph.
(v) Defined contribution plans subject to the funding
standards
Except as provided by the Secretary, a defined contribution
plan which is subject to the funding standards of section 412
shall be treated in the same manner as a stock bonus or
profit-sharing plan for purposes of this subparagraph.
(B) Profit-sharing plan of affiliated group
In the case of a profit-sharing plan, or a stock bonus plan
in which contributions are determined with reference to
profits, of a group of corporations which is an affiliated
group within the meaning of section 1504, if any member of such
affiliated group is prevented from making a contribution which
it would otherwise have made under the plan, by reason of
having no current or accumulated earnings or profits or because
such earnings or profits are less than the contributions which
it would otherwise have made, then so much of the contribution
which such member was so prevented from making may be made, for
the benefit of the employees of such member, by the other
members of the group, to the extent of current or accumulated
earnings or profits, except that such contribution by each such
other member shall be limited, where the group does not file a
consolidated return, to that proportion of its total current
and accumulated earnings or profits remaining after adjustment
for its contribution deductible without regard to this
subparagraph which the total prevented contribution bears to
the total current and accumulated earnings or profits of all
the members of the group remaining after adjustment for all
contributions deductible without regard to this subparagraph.
Contributions made under the preceding sentence shall be
deductible under subparagraph (A) of this paragraph by the
employer making such contribution, and, for the purpose of
determining amounts which may be carried forward and deducted
under the second sentence of subparagraph (A) of this paragraph
in succeeding taxable years, shall be deemed to have been made
by the employer on behalf of whose employees such contributions
were made.
(4) Trusts created or organized outside the United States
If a stock bonus, pension, or profit-sharing trust would
qualify for exemption under section 501(a) except for the fact
that it is a trust created or organized outside the United
States, contributions to such a trust by an employer which is a
resident, or corporation, or other entity of the United States,
shall be deductible under the preceding paragraphs.
(5) Other plans
If the plan is not one included in paragraph (1), (2), or (3),
in the taxable year in which an amount attributable to the
contribution is includible in the gross income of employees
participating in the plan, but, in the case of a plan in which
more than one employee participates only if separate accounts are
maintained for each employee. For purposes of this section, any
vacation pay which is treated as deferred compensation shall be
deductible for the taxable year of the employer in which paid to
the employee.
(6) Time when contributions deemed made
For purposes of paragraphs (1), (2), and (3), a taxpayer shall
be deemed to have made a payment on the last day of the preceding
taxable year if the payment is on account of such taxable year
and is made not later than the time prescribed by law for filing
the return for such taxable year (including extensions thereof).
(7) Limitation on deductions where combination of defined
contribution plan and defined benefit plan
(A) In general
If amounts are deductible under the foregoing paragraphs of
this subsection (other than paragraph (5)) in connection with 1
or more defined contribution plans and 1 or more defined
benefit plans or in connection with trusts or plans described
in 2 or more of such paragraphs, the total amount deductible in
a taxable year under such plans shall not exceed the greater of
-
(i) 25 percent of the compensation otherwise paid or
accrued during the taxable year to the beneficiaries under
such plans, or
(ii) the amount of contributions made to or under the
defined benefit plans to the extent such contributions do not
exceed the amount of employer contributions necessary to
satisfy the minimum funding standard provided by section 412
with respect to any such defined benefit plans for the plan
year which ends with or within such taxable year (or for any
prior plan year).
A defined contribution plan which is a pension plan shall not
be treated as failing to provide definitely determinable
benefits merely by limiting employer contributions to amounts
deductible under this section. For purposes of clause (ii), if
paragraph (1)(D) applies to a defined benefit plan for any plan
year, the amount necessary to satisfy the minimum funding
standard provided by section 412 with respect to such plan for
such plan year shall not be less than the unfunded current
liability of such plan under section 412(l).
In the case of a defined benefit plan which is a single employer plan,
the amount necessary to satisfy the minimum funding standard
provided by section 412 shall not be less than the
plan's funding shortfall determined under section 430.
(B) Carryover of contributions in excess of the deductible
limit
Any amount paid under the plans in any taxable year in excess
of the limitation of subparagraph (A) shall be deductible in
the succeeding taxable years in order of time, but the amount
so deductible under this subparagraph in any 1 such succeeding
taxable year together with the amount allowable under
subparagraph (A) shall not exceed 25 percent of the
compensation otherwise paid or accrued during such taxable year
to the beneficiaries under the plans.
(C) Paragraph not to apply in certain cases.--
(i) Beneficiary test.--This paragraph shall
not have the effect of reducing the amount
otherwise deductible under paragraphs (1), (2),
and (3), if no employee is a beneficiary under more than
1 trust or under a trust and an annuity plan.
(ii) Elective deferrals.--If, in connection
with 1 or more defined contribution plans and 1 or
more defined benefit plans, no amounts (other than
elective deferrals (as defined in section
402(g)(3))) are contributed to any of the defined
contribution plans for the taxable year, then
subparagraph (A) shall not apply with respect to
any of such defined contribution plans and defined
benefit plans.
(iii) Limitation.--In the case of employer
contributions to 1 or more defined contribution
plans, this paragraph shall only apply to the
extent that such contributions exceed 6 percent of
the compensation otherwise paid or accrued during
the taxable year to the beneficiaries under such
plans. For purposes of this clause, amounts
carried over from preceding taxable years under
subparagraph (B) shall be treated as employer
contributions to 1 or more defined contributions
to the extent attributable to employer
contributions to such plans in such preceding
taxable years.
(iv) Guaranteed plans.--In applying this
paragraph, any single-employer plan covered under
section 4021 of the Employee Retirement Income
Security Act of 1974 shall not be taken into
account.
(v) Multiemployer plans.--In applying this
paragraph, any multiemployer plan shall not be
taken into account.
(D) Insurance contract plans.--For purposes of
this paragraph, a plan described in section 412(e)(3)
shall be treated as a defined benefit plan.
(8) Self-employed individuals
In the case of a plan included in paragraph (1), (2), or (3)
which provides contributions or benefits for employees some or
all of whom are employees within the meaning of section
401(c)(1), for purposes of this section -
(A) the term ''employee'' includes an individual who is an
employee within the meaning of section 401(c)(1), and the
employer of such individual is the person treated as his
employer under section 401(c)(4);
(B) the term ''earned income'' has the meaning assigned to it
by section 401(c)(2);
(C) the contributions to such plan on behalf of an individual
who is an employee within the meaning of section 401(c)(1)
shall be considered to satisfy the conditions of section 162 or
212 to the extent that such contributions do not exceed the
earned income of such individual (determined without regard to
the deductions allowed by this section) derived from the trade
or business with respect to which such plan is established, and
to the extent that such contributions are not allocable
(determined in accordance with regulations prescribed by the
Secretary) to the purchase of life, accident, health, or other
insurance; and
(D) any reference to compensation shall, in the case of an
individual who is an employee within the meaning of section
401(c)(1), be considered to be a reference to the earned income
of such individual derived from the trade or business with
respect to which the plan is established.
(9) Certain contributions to employee stock ownership plans
(A) Principal payments
Notwithstanding the provisions of paragraphs (3) and (7), if
contributions are paid into a trust which forms a part of an
employee stock ownership plan (as described in section
4975(e)(7)), and such contributions are, on or before the time
prescribed in paragraph (6), applied by the plan to the
repayment of the principal of a loan incurred for the purpose
of acquiring qualifying employer securities (as described in
section 4975(e)(8)), such contributions shall be deductible
under this paragraph for the taxable year determined under
paragraph (6). The amount deductible under this paragraph shall
not, however, exceed 25 percent of the compensation otherwise
paid or accrued during the taxable year to the employees under
such employee stock ownership plan. Any amount paid into such
trust in any taxable year in excess of the amount deductible
under this paragraph shall be deductible in the succeeding
taxable years in order of time to the extent of the difference
between the amount paid and deductible in each such succeeding
year and the maximum amount deductible for such year under the
preceding sentence.
(B) Interest payment
Notwithstanding the provisions of paragraphs (3) and (7), if
contributions are made to an employee stock ownership plan
(described in subparagraph (A)) and such contributions are
applied by the plan to the repayment of interest on a loan
incurred for the purpose of acquiring qualifying employer
securities (as described in subparagraph (A)), such
contributions shall be deductible for the taxable year with
respect to which such contributions are made as determined
under paragraph (6).
(C) S corporations
This paragraph shall not apply to an S corporation.
(D) Qualified gratuitous transfers
A qualified gratuitous transfer (as defined in section
664(g)(1)) shall have no effect on the amount or amounts
otherwise deductible under paragraph (3) or (7) or under this
paragraph.
(10) Contributions by certain ministers to retirement income
accounts
In the case of contributions made by a minister described in
section 414(e)(5) to a retirement income account described in
section 403(b)(9) and not by a person other than such minister,
such contributions -
(A) shall be treated as made to a trust which is exempt from
tax under section 501(a) and which is part of a plan which is
described in section 401(a), and
(B) shall be deductible under this subsection to the extent
such contributions do not exceed the limit on elective
deferrals under section 402(g) or the limit on annual additions
under section 415.
For purposes of this paragraph, all plans in which the minister
is a participant shall be treated as one plan.
(11) Determinations relating to deferred compensation
For purposes of determining under this section -
(A) whether compensation of an employee is deferred
compensation; and
(B) when deferred compensation is paid,
no amount shall be treated as received by the employee, or paid,
until it is actually received by the employee.
(12) Definition of compensation
For purposes of paragraphs (3), (7), (8), and (9) and subsection (h)(1)(C),
the term ''compensation'' shall include amounts treated as ''participant's
compensation'' under subparagraph (C) or (D) of section 415(c)(3).
(b) Method of contributions, etc., having the effect of a plan;
certain deferred benefits
(1) Method of contributions, etc., having the effect of a plan
If -
(A) there is no plan, but
(B) there is a method or arrangement of employer
contributions or compensation which has the effect of a stock
bonus, pension, profit-sharing, or annuity plan, or other plan
deferring the receipt of compensation (including a plan
described in paragraph (2)),
subsection (a) shall apply as if there were such a plan.
(2) Plans providing certain deferred benefits
(A) In general
For purposes of this section, any plan providing for deferred
benefits (other than compensation) for employees, their
spouses, or their dependents shall be treated as a plan
deferring the receipt of compensation. In the case of such a
plan, for purposes of this section, the determination of when
an amount is includible in gross income shall be made without
regard to any provisions of this chapter excluding such
benefits from gross income.
(B) Exception
Subparagraph (A) shall not apply to any benefit provided
through a welfare benefit fund (as defined in section 419(e)).
(c) Certain negotiated plans
If contributions are paid by an employer -
(1) under a plan under which such contributions are held in
trust for the purpose of paying (either from principal or income
or both) for the benefit of employees and their families and
dependents at least medical or hospital care, or pensions on
retirement or death of employees; and
(2) such plan was established prior to January 1, 1954, as a
result of an agreement between employee representatives and the
Government of the United States during a period of Government
operation, under seizure powers, of a major part of the
productive facilities of the industry in which such employer is
engaged,
such contributions shall not be deductible under this section nor
be made nondeductible by this section, but the deductibility
thereof shall be governed solely by section 162 (relating to trade
or business expenses). For purposes of this chapter and subtitle
B, in the case of any individual who before July 1, 1974, was a
participant in a plan described in the preceding sentence -
(A) such individual, if he is or was an employee within the
meaning of section 401(c)(1), shall be treated (with respect to
service covered by the plan) as being an employee other than an
employee within the meaning of section 401(c)(1) and as being an
employee of a participating employer under the plan,
(B) earnings derived from service covered by the plan shall be
treated as not being earned income within the meaning of section
401(c)(2), and
(C) such individual shall be treated as an employee of a
participating employer under the plan with respect to service
before July 1, 1975, covered by the plan.
Section 277 (relating to deductions incurred by certain membership
organizations in transactions with members) does not apply to any
trust described in this subsection. The first and third sentences
of this subsection shall have no application with respect to
amounts contributed to a trust on or after any date on which such
trust is qualified for exemption from tax under section 501(a).
(d) Deductibility of payments of deferred compensation, etc., to
independent contractors
If a plan would be described in so much of subsection (a) as
precedes paragraph (1) thereof (as modified by subsection (b)) but
for the fact that there is no employer-employee relationship, the
contributions or compensation -
(1) shall not be deductible by the payor thereof under this
chapter, but
(2) shall (if they would be deductible under this chapter but
for paragraph (1)) be deductible under this subsection for the
taxable year in which an amount attributable to the contribution
or compensation is includible in the gross income of the persons
participating in the plan.
(e) Contributions allocable to life insurance protection for
self-employed individuals
In the case of a self-employed individual described in section
401(c)(1), contributions which are allocable (determined under
regulations prescribed by the Secretary) to the purchase of life,
accident, health, or other insurance shall not be taken into
account under paragraph (1), (2), or (3) of subsection (a).
((f) Repealed. Pub. L. 98-369, div. A, title VII, Sec. 713(b)(3),
July 18, 1984, 98 Stat. 957)
(g) Certain employer liability payments considered as contributions
(1) In general
For purposes of this section, any amount paid by an employer
under section 4041(b), 4062, 4063, or 4064, or part 1 of subtitle
E of title IV of the Employee Retirement Income Security Act of
1974 shall be treated as a contribution to which this section
applies by such employer to or under a stock bonus, pension,
profit-sharing, or annuity plan.
(2) Controlled group deductions
In the case of a payment described in paragraph (1) made by an
entity which is liable because it is a member of a commonly
controlled group of corporations, trades, or businesses, within
the meaning of subsection (b) or (c) of section 414, the fact
that the entity did not directly employ participants of the plan
with respect to which the liability payment was made shall not
affect the deductibility of a payment which otherwise satisfies
the conditions of section 162 (relating to trade or business
expenses) or section 212 (relating to expenses for the production
of income).
(3) Timing of deduction of contributions
(A) In general
Except as otherwise provided in this paragraph, any payment
described in paragraph (1) shall (subject to the last sentence
of subsection (a)(1)(A)) be deductible under this section when
paid.
(B) Contributions under standard terminations
Subparagraph (A) shall not apply (and subsection (a)(1)(A)
shall apply) to any payments described in paragraph (1) which
are paid to terminate a plan under section 4041(b) of the
Employee Retirement Income Security Act of 1974 to the extent
such payments result in the assets of the plan being in excess
of the total amount of benefits under such plan which are
guaranteed by the Pension Benefit Guaranty Corporation under
section 4022 of such Act.
(C) Contributions to certain trusts
Subparagraph (A) shall not apply to any payment described in
paragraph (1) which is made under section 4062(c) of such Act
and such payment shall be deductible at such time as may be
prescribed in regulations which are based on principles similar
to the principles of subsection (a)(1)(A).
(4) References to Employee Retirement Income Security Act of 1974
For purposes of this subsection, any reference to a section of
the Employee Retirement Income Security Act of 1974 shall be
treated as a reference to such section as in effect on the date
of the enactment of the Retirement Protection Act of 1994.
(h) Special rules for simplified employee pensions
(1) In general
Employer contributions to a simplified employee pension shall
be treated as if they are made to a plan subject to the
requirements of this section. Employer contributions to a
simplified employee pension are subject to the following
limitations:
(A) Contributions made for a year are deductible -
(i) in the case of a simplified employee pension maintained
on a calendar year basis, for the taxable year with or within
which the calendar year ends, or
(ii) in the case of a simplified employee pension which is
maintained on the basis of the taxable year of the employer,
for such taxable year.
(B) Contributions shall be treated for purposes of this
subsection as if they were made for a taxable year if such
contributions are made on account of such taxable year and are
made not later than the time prescribed by law for filing the
return for such taxable year (including extensions thereof).
(C) The amount deductible in a taxable year for a simplified
employee pension shall not exceed 25 percent of the
compensation paid to the employees during the calendar year
ending with or within the taxable year (or during the taxable
year in the case of a taxable year described in subparagraph
(A)(ii)). The excess of the amount contributed over the amount
deductible for a taxable year shall be deductible in the
succeeding taxable years in order of time, subject to the 25
percent limit of the preceding sentence.
(2) Effect on certain trusts
For any taxable year for which the employer has a deduction
under paragraph (1), the otherwise applicable limitations in
subsection (a)(3)(A) shall be reduced by the amount of the
allowable deductions under paragraph (1) with respect to
participants in the trust subject to subsection (a)(3)(A).
(3) Coordination with subsection (a)(7)
For purposes of subsection (a)(7), a simplified employee
pension shall be treated as if it were a separate stock bonus or
profit-sharing trust.
((i) Repealed. Pub. L. 99-514, title XI, Sec. 1171(b)(6), Oct. 22,
1986, 100 Stat. 2513)
(j) Special rules relating to application with section 415
(1) No deduction in excess of section 415 limitation
In computing the amount of any deduction allowable under
paragraph (1), (2), (3), (4), (7), or (9) of subsection (a) for
any year -
(A) in the case of a defined benefit plan, there shall not be
taken into account any benefits for any year in excess of any
limitation on such benefits under section 415 for such year, or
(B) in the case of a defined contribution plan, the amount of
any contributions otherwise taken into account shall be reduced
by any annual additions in excess of the limitation under
section 415 for such year.
(2) No advance funding of cost-of-living adjustments
For purposes of clause (i), (ii) or (iii) of subsection
(a)(1)(A), and in computing the full funding limitation, there
shall not be taken into account any adjustments under section
415(d)(1) for any year before the year for which such adjustment
first takes effect.
(k) Deduction for dividends paid on certain employer securities
(1) General rule
In the case of a C corporation, there shall be allowed as a
deduction for a taxable year the amount of any applicable
dividend paid in cash by such corporation
with respect to applicable employer securities. Such deduction
shall be in addition to the deductions allowed under subsection
(a).
(2) Applicable dividend
For purposes of this subsection -
(A) In general
The term ''applicable dividend'' means any dividend which, in
accordance with the plan provisions -
(i) is paid in cash to the participants in the plan or
their beneficiaries,
(ii) is paid to the plan and is distributed in cash to
participants in the plan or their beneficiaries not later
than 90 days after the close of the plan year in which paid,
(iii) is, at the election of such participants or their
beneficiaries -
(I) payable as provided in clause (i) or (ii), or
(II) paid to the plan and reinvested in qualifying
employer securities, or
(iv) is used to make payments on a loan described in
subsection (a)(9) the proceeds of which were used to acquire
the employer securities (whether or not allocated to
participants) with respect to which the dividend is paid.
(B) Limitation on certain dividends
A dividend described in subparagraph (A)(iv) which is paid
with respect to any employer security which is allocated to a
participant shall not be treated as an applicable dividend
unless the plan provides that employer securities with a fair
market value of not less than the amount of such dividend are
allocated to such participant for the year which (but for
subparagraph (A)) such dividend would have been allocated to
such participant.
(3) Applicable employer securities
For purposes of this subsection, the term ''applicable employer
securities'' means, with respect to any dividend, employer
securities which are held on the record date for such dividend by
an employee stock ownership plan which is maintained by -
(A) the corporation paying such dividend, or
(B) any other corporation which is a member of a controlled
group of corporations (within the meaning of section 409(l)(4))
which includes such corporation.
(4) Time for deduction
(A) In general
The deduction under paragraph (1) shall be allowable in the
taxable year of the corporation in which the dividend is paid
or distributed to a participant or his beneficiary.
``(B) Reinvestment dividends.--For purposes of
subparagraph (A), an applicable dividend reinvested
pursuant to clause (iii)(II) of paragraph (2)(A) shall
be treated as paid in the taxable year of the
corporation in which such dividend is reinvested in
qualifying employer securities or in which the election
under clause (iii) of paragraph (2)(A) is made,
whichever is later.''.
(C) Repayment of loans
In the case of an applicable dividend described in clause
(iv) of paragraph (2)(A), the deduction under paragraph (1)
shall be allowable in the taxable year of the corporation in
which such dividend is used to repay the loan described in such
clause.
(5) Other rules
For purposes of this subsection -
(A) Disallowance of deduction
The Secretary may disallow the deduction under paragraph (1)
for any dividend if the Secretary determines that such dividend
constitutes, in substance, an avoidance or evasion of taxation.
(B) Plan qualification
A plan shall not be treated as violating the requirements of
section 401, 409, or 4975(e)(7), or as engaging in a prohibited
transaction for purposes of section 4975(d)(3), merely by
reason of any payment or distribution described in paragraph
(2)(A).
(6) Definitions
For purposes of this subsection -
(A) Employer securities
The term ''employer securities'' has the meaning given such
term by section 409(l).
(B) Employee stock ownership plan
The term ''employee stock ownership plan'' has the meaning
given such term by section 4975(e)(7). Such term includes a tax
credit employee stock ownership plan (as defined in section
409).
(7) Full vesting.--In accordance with section 411, an
applicable dividend described in clause (iii)(II) of paragraph
(2)(A) shall be subject to the requirements of section
411(a)(1).''.
(l) Limitation on amount of annual compensation taken into account
For purposes of applying the limitations of this section, the
amount of annual compensation of each employee taken into account
under the plan for any year shall not exceed $200,000. The
Secretary shall adjust the $200,000 amount at the same time, and by
the same amount, as any adjustment under section 401(a)(17)(B). For
purposes of clause (i), (ii), or (iii) of subsection (a)(1)(A), and
in computing the full funding limitation, any adjustment under the
preceding sentence shall not be taken into account for any year
before the year for which such adjustment first takes effect.
(m) Special rules for simple retirement accounts
(1) In general
Employer contributions to a simple retirement account shall be
treated as if they are made to a plan subject to the requirements
of this section.
(2) Timing
(A) Deduction
Contributions described in paragraph (1) shall be deductible
in the taxable year of the employer with or within which the
calendar year for which the contributions were made ends.
(B) Contributions after end of year
For purposes of this subsection, contributions shall be
treated as made for a taxable year if they are made on account
of the taxable year and are made not later than the time
prescribed by law for filing the return for the taxable year
(including extensions thereof).
(n) Elective deferrals not taken into account for purposes of
deduction limits
Elective deferrals (as defined in section 402(g)(3)) shall not be
subject to any limitation contained in paragraph (3), (7), or (9)
of subsection (a) or paragraph (1)(C)of subsection (h), and such elective
deferrals shall not be taken into account in applying any such limitation
to any other contributions.
(o) Deduction Limit for Single-Employer Plans.--For purposes of
subsection (a)(1)(A)--
(1) In general.--In the case of a defined benefit plan to
which subsection (a)(1)(A) applies (other than a multiemployer
plan), the amount determined under this subsection for any
taxable year shall be equal to the greater of--
(A) the sum of the amounts determined under
paragraph (2) with respect to each plan year ending with
or within the taxable year, or
(B) the sum of the minimum required contributions
under section 430 for such plan years.
(2) Determination of amount.--
(A) In general.--The amount determined under this
paragraph for any plan year shall be equal to the excess
(if any) of--
(i) the sum of--
(I) the funding target for the
plan year,
(II) the target normal cost for
the plan year, and
(III) the cushion amount for the
plan year, over
(ii) the value (determined under section
430(g)(2)) of the assets of the plan which are
held by the plan as of the valuation date for the
plan year.
(B) Special rule for certain employers.--If
section 430(i) does not apply to a plan for a plan year,
the amount determined under subparagraph (A)(i) for the
plan year shall in no event be less than the sum of--
(i) the funding target for the plan year
(determined as if section 430(i) applied to the
plan), plus
(ii) the target normal cost for the plan
year (as so determined).
(3) Cushion amount.--For purposes of paragraph
(2)(A)(i)(III)--
(A) In general.--The cushion amount for any plan
year is the sum of--
(i) 50 percent of the funding target for the
plan year, and
(ii) the amount by which the funding target
for the plan year would increase if the plan were
to take into account--
(I) increases in compensation
which are expected to occur in
succeeding plan years, or
(II) if the plan does not base
benefits for service to date on
compensation, increases in benefits
which are expected to occur in
succeeding plan years (determined on the
basis of the average annual increase in
benefits over the 6 immediately
preceding plan years).
(B) Limitations.--
(i) In general.--
In <<NOTE: Applicability.>> making the computation
under subparagraph (A)(ii), the plan's actuary
shall assume that the limitations under subsection
(l) and section 415(b) shall apply.
``(ii) Expected increases.--In the case of a
plan year during which a plan is covered under
section 4021 of the Employee Retirement Income
Security Act of 1974, the plan's actuary may,
notwithstanding subsection (l), take into account
increases in the limitations which are expected to
occur in succeeding plan years.
(4) Special rules for plans with 100 or fewer
participants.--
(A) In general.--For purposes of determining the
amount under paragraph (3) for any plan year, in the
case of a plan which has 100 or fewer participants for
the plan year, the liability of the plan attributable to
benefit increases for highly compensated employees (as
defined in section 414(q)) resulting from a plan
amendment which is made or becomes effective, whichever
is later, within the last 2 years shall not be taken
into account in determining the target liability.
(B) Rule for determining number of participants.--
For purposes of determining the number of plan
participants, all defined benefit plans maintained by
the same employer (or any member of such employer's
controlled group (within the meaning of section
412(f)(4))) shall be treated as one plan, but only
participants of such member or employer shall be taken
into account.
(5) Special rule for terminating plans.--In the case of a
plan which, subject to section 4041 of the Employee Retirement
Income Security Act of 1974, terminates during the plan year,
the amount determined under paragraph (2) shall in no event be
less than the amount required to make the plan sufficient for
benefit liabilities (within the meaning of section 4041(d) of
such Act).
(6) Actuarial assumptions.--Any computation under this
subsection for any plan year shall use the same actuarial
assumptions which are used for the plan year under section 430.
(7) Definitions.--Any term used in this subsection which
is also used in section 430 shall have the same meaning given
such term by section 430.
Sources
(Aug. 16, 1954, ch. 736, 68A Stat. 138; Pub. L. 85-866, title I,
Sec. 24, Sept. 2, 1958, 72 Stat. 1623; Pub. L. 87-792, Sec. 3, Oct.
10, 1962, 76 Stat. 819; Pub. L. 87-863, Sec. 2(b), Oct. 23, 1962,
76 Stat. 1141; Pub. L. 89-809, title II, Sec. 204(a), (b)(2), (3),
Nov. 13, 1966, 80 Stat. 1577; Pub. L. 91-172, title III, Sec.
321(b)(3), Dec. 30, 1969, 83 Stat. 591; Pub. L. 93-406, title II,
Sec. 1013(c), 1016(a)(3), 2001(a), (g)(2)(E), (F), 2004(b), (c)(1),
2007(a), (b), title IV, Sec. 4401(a), formerly Sec. 4081(a), Sept.
2, 1974, 88 Stat. 921, 929, 952, 957, 986, 993, 994, 1033,
renumbered Sec. 4401(a), Pub. L. 96-364, title I, Sec. 108(a),
Sept. 26, 1980, 94 Stat. 1267; Pub. L. 94-267, Sec. 1(c)(3), Apr.
15, 1976, 90 Stat. 367; Pub. L. 94-455, title XV, Sec. 1502(a)(2),
title XIX, Sec. 1901(a)(59), 1906(b)(13)(A), Oct. 4, 1976, 90 Stat.
1737, 1774, 1834; Pub. L. 95-600, title I, Sec. 133(a), (b),
141(f)(9), 152(f), Nov. 6, 1978, 92 Stat. 2783, 2795, 2799; Pub. L.
96-222, title I, Sec. 101(a)(10)(E), (J)(ii), Apr. 1, 1980, 94
Stat. 202, 204; Pub. L. 96-364, title II, Sec. 205, Sept. 26, 1980,
94 Stat. 1287; Pub. L. 97-34, title III, Sec. 312(a), 331(b),
333(a), Aug. 13, 1981, 95 Stat. 283, 293, 296; Pub. L. 97-248,
title II, Sec. 235(f), 237(e)(2), 238(a), 253(b), Sept. 3, 1982, 96
Stat. 507, 512, 533; Pub. L. 98-369, div. A, title IV, Sec.
474(r)(14), title V, Sec. 512(a), 542(a), title VII, Sec.
713(b)(3), (d)(4)(A), (5), (6), (9), July 18, 1984, 98 Stat. 842,
862, 890, 957, 958; Pub. L. 99-272, title XI, Sec. 11011(c)(1),
(2), Apr. 7, 1986, 100 Stat. 257, 258; Pub. L. 99-514, title XI,
Sec. 1106(d)(2), 1108(c), 1112(d)(2), 1131(a), (b), 1136(b),
1171(b)(6), 1173(a), title XVIII, Sec. 1848(c),
1851(b)(2)(A)-(C)(ii), 1854(b)(2)-(5), 1875(c)(7), Oct. 22, 1986,
100 Stat. 2424, 2433, 2445, 2476, 2477, 2486, 2513, 2515, 2857,
2863, 2878, 2895; Pub. L. 100-203, title IX, Sec. 9307(c), (d),
title X, Sec. 10201(b)(2), (3), Dec. 22, 1987, 101 Stat. 1330-357,
1330-387; Pub. L. 100-647, title I, Sec. 1011(d)(1), (4), (f)(6),
1011A(e)(4), 1011B(h)(3), (6), 1018(t)(4)(A), (5), title II, Sec.
2005(b), Nov. 10, 1988, 102 Stat. 3459, 3463, 3478, 3491, 3492,
3588, 3589, 3610; Pub. L. 101-239, title VII, Sec. 7302(a),
7841(b)(1), Dec. 19, 1989, 103 Stat. 2351, 2428; Pub. L. 101-508,
title XI, Sec. 11812(b)(7), Nov. 5, 1990, 104 Stat. 1388-535; Pub.
L. 102-318, title V, Sec. 522(a)(2), July 3, 1992, 106 Stat. 314;
Pub. L. 103-66, title XIII, Sec. 13212(c)(1), Aug. 10, 1993, 107
Stat. 472; Pub. L. 103-465, title VII, Sec. 751(a)(11), Dec. 8,
1994, 108 Stat. 5022; Pub. L. 104-188, title I, Sec. 1316(d)(1),
(2), 1421(b)(2), 1431(b)(3), 1461(b), 1704(q)(1), (t)(76), Aug. 20,
1996, 110 Stat. 1786, 1795, 1803, 1823, 1887, 1891; Pub. L. 105-34,
title XV, Sec. 1530(c)(2), title XVI, Sec. 1601(d)(2)(C), Aug. 5,
1997, 111 Stat. 1078, 1088; Pub. L. 105-206, title VI, Sec.
6015(d), title VII, Sec. 7001(a), July 22, 1998, 112 Stat. 821,
827; Pub. L. 107-16, title VI, Sec. 611(c)(1), 614(a),
616(a)-(b)(2)(A), 632(a)(3)(B), 652(a), 662(a), (b), June 7, 2001,
115 Stat. 97, 102, 103, 114, 129, 142.)
Amendment of Section
AMENDMENT OF SECTION
For termination of amendment by section 901 of Pub. L. 107-16,
see Effective and Termination Dates of 2001 Amendment note below.
References in Text
REFERENCES IN TEXT
The Social Security Act, referred to in subsec. (a)(1)(C), is act
Aug. 14, 1935, ch. 531, 49 Stat. 620, as amended. Title II of the
Social Security Act is classified generally to subchapter II (Sec.
401 et seq.) of Title 42, The Public Health and Welfare. For
complete classification of this Act to the Code, see section 1305
of Title 42 and Tables.
Section 401(a)(17), referred to in subsec. (a)(2), was repealed
by Pub. L. 97-248, title II, Sec. 237(b), Sept. 3, 1982, 96 Stat.
511. A new section 401(a)(17) was added by Pub. L. 99-514, title
XI, Sec. 1106(d)(1), Oct. 22, 1986, 100 Stat. 2423.
The date of the enactment of the Tax Reform Act of 1986, referred
to in subsec. (a)(3)(A)(v)(II), is the date of enactment of Pub. L.
99-514, which was approved Oct. 22, 1986.
The Employee Retirement Income Security Act of 1974, referred to
in subsecs. (a)(1)(D)(iv), (g)(1), (3)(B), (C), (4), is Pub. L.
93-406, Sept. 2, 1974, 88 Stat. 829, as amended, which is
classified principally to chapter 18 (Sec. 1001 et seq.) of Title
29, Labor. Part 1 of subtitle E of title IV of the Employee
Retirement Income Security Act of 1974 is classified generally to
part 1 (Sec. 1381 et seq.) of subtitle E of subchapter III of
chapter 18 of Title 29. Sections 4022, 4041, 4062, 4063, and 4064
of the Employee Retirement Income Security Act of 1974 are
classified to sections 1322, 1341, 1362, 1363, and 1364,
respectively, of Title 29. For complete classification of this Act
to the Code, see Short Title note set out under section 1001 of
Title 29 and Tables.
The date of the enactment of the Retirement Protection Act of
1994, referred to in subsec. (g)(4), is the date of enactment of
subtitle F (Sec. 750-781) of title VII of Pub. L. 103-465, which
was approved Dec. 8, 1994.
Miscellaneous
AMENDMENTS
2006 - Pension Protection Act of 2006 (P.L. 109-280)
SEC. 803. UPDATING DEDUCTION RULES FOR COMBINATION OF PLANS.
(a) In General.--Subparagraph (C) of section 404(a)(7) of the
Internal Revenue Code of 1986 <<NOTE: 26 USC 404.>> (relating to
limitation on deductions where combination of defined contribution plan
and defined benefit plan) is amended by adding after clause (ii) the
following new clause:
``(iii) Limitation.--In the case of employer
contributions to 1 or more defined contribution
plans, this paragraph shall only apply to the
extent that such contributions exceed 6 percent of
the compensation otherwise paid or accrued during
the taxable year to the beneficiaries under such
plans. For purposes of this clause, amounts
carried over from preceding taxable years under
subparagraph (B) shall be treated as employer
contributions to 1 or more defined contributions
to the extent attributable to employer
contributions to such plans in such preceding
taxable years.''.
(b) Exception From Limitation on Deduction Where Combination of
Defined Contribution and Defined Benefit Plans.--Section 404(a)(7)(C) of
such Code, as amended by this Act, is amended by adding at the end the
following new clause:
``(v) Multiemployer plans.--In applying this
paragraph, any multiemployer plan shall not be
taken into account.''.
2006 - Pension Protection Act of 2006 (P.L. 109-280)
SEC. 802. DEDUCTION LIMITS FOR MULTIEMPLOYER PLANS.
(a) Increase in Deduction.--Section 404(a)(1)(D) of the Internal
Revenue Code of 1986, as amended by this Act, is amended to read as
follows:
``(D) Amount determined on basis of unfunded current
liability.--In the case of a defined benefit plan which
is a multiemployer plan, except as provided in
regulations, the maximum amount deductible under the
limitations of this paragraph shall not be less than the
excess (if any) of--
``(i) 140 percent of the current liability of
the plan determined under section 431(c)(6)(C),
over
``(ii) the value of the plan's assets
determined under section 431(c)(2).''.
2006 - Pension Protection Act of 2006 (P.L. 109-280)
SEC. 801. INCREASE IN DEDUCTION LIMIT FOR SINGLE-EMPLOYER PLANS.
(a) In General.--Section 404 of the Internal Revenue Code of
1986 <<NOTE: 26 USC 404.>> (relating to deduction for contributions of
an employer
to an employees' trust or annuity plan and compensation under a deferred
payment plan) is amended--
(1) in subsection (a)(1)(A), by inserting ``in the case of a
defined benefit plan other than a multiemployer plan, in an
amount determined under subsection (o), and in the case of any
other plan'' after ``section 501(a),'', and
(2) by inserting at the end the following new subsection:
``(o) Deduction Limit for Single-Employer Plans.--For purposes of
subsection (a)(1)(A)--
``(1) In general.--In the case of a defined benefit plan to
which subsection (a)(1)(A) applies (other than a multiemployer
plan), the amount determined under this subsection for any
taxable year shall be equal to the greater of--
``(A) the sum of the amounts determined under
paragraph (2) with respect to each plan year ending with
or within the taxable year, or
``(B) the sum of the minimum required contributions
under section 430 for such plan years.
``(2) Determination of amount.--
``(A) In general.--The amount determined under this
paragraph for any plan year shall be equal to the excess
(if any) of--
``(i) the sum of--
``(I) the funding target for the
plan year,
``(II) the target normal cost for
the plan year, and
``(III) the cushion amount for the
plan year, over
``(ii) the value (determined under section
430(g)(2)) of the assets of the plan which are
held by the plan as of the valuation date for the
plan year.
``(B) Special rule for certain employers.--If
section 430(i) does not apply to a plan for a plan year,
the amount determined under subparagraph (A)(i) for the
plan year shall in no event be less than the sum of--
``(i) the funding target for the plan year
(determined as if section 430(i) applied to the
plan), plus
``(ii) the target normal cost for the plan
year (as so determined).
``(3) Cushion amount.--For purposes of paragraph
(2)(A)(i)(III)--
``(A) In general.--The cushion amount for any plan
year is the sum of--
``(i) 50 percent of the funding target for the
plan year, and
``(ii) the amount by which the funding target
for the plan year would increase if the plan were
to take into account--
``(I) increases in compensation
which are expected to occur in
succeeding plan years, or
``(II) if the plan does not base
benefits for service to date on
compensation, increases in benefits
which are expected to occur in
succeeding plan years (determined on the
basis of the average annual increase in
benefits over the 6 immediately
preceding plan years).
``(B) Limitations.--
``(i) In general.--
In <<NOTE: Applicability.>> making the computation
under subparagraph (A)(ii), the plan's actuary
shall assume that the limitations under subsection
(l) and section 415(b) shall apply.
``(ii) Expected increases.--In the case of a
plan year during which a plan is covered under
section 4021 of the Employee Retirement Income
Security Act of 1974, the plan's actuary may,
notwithstanding subsection (l), take into account
increases in the limitations which are expected to
occur in succeeding plan years.
``(4) Special rules for plans with 100 or fewer
participants.--
``(A) In general.--For purposes of determining the
amount under paragraph (3) for any plan year, in the
case of a plan which has 100 or fewer participants for
the plan year, the liability of the plan attributable to
benefit increases for highly compensated employees (as
defined in section 414(q)) resulting from a plan
amendment which is made or becomes effective, whichever
is later, within the last 2 years shall not be taken
into account in determining the target liability.
``(B) Rule for determining number of participants.--
For purposes of determining the number of plan
participants, all defined benefit plans maintained by
the same employer (or any member of such employer's
controlled group (within the meaning of section
412(f)(4))) shall be treated as one plan, but only
participants of such member or employer shall be taken
into account.
``(5) Special rule for terminating plans.--In the case of a
plan which, subject to section 4041 of the Employee Retirement
Income Security Act of 1974, terminates during the plan year,
the amount determined under paragraph (2) shall in no event be
less than the amount required to make the plan sufficient for
benefit liabilities (within the meaning of section 4041(d) of
such Act).
``(6) Actuarial assumptions.--Any computation under this
subsection for any plan year shall use the same actuarial
assumptions which are used for the plan year under section 430.
``(7) Definitions.--Any term used in this subsection which
is also used in section 430 shall have the same meaning given
such term by section 430.''.
(b) Exception From Limitation on Deduction Where Combination of
Defined Contribution and Defined Benefit Plans.--Section 404(a)(7)(C) of
such Code, as amended by this Act, <<NOTE: 26 USC 404.>> is amended by
adding at the end the following new clause:
``(iv) Guaranteed plans.--In applying this
paragraph, any single-employer plan covered under
section 4021 of the Employee Retirement Income
Security Act of 1974 shall not be taken into
account.''.
(c) Technical and Conforming Amendments.--
(1) The last sentence of section 404(a)(1)(A) of such Code
is amended by striking ``section 412'' each place it appears and
inserting ``section 431''.
(2) Section 404(a)(1)(B) of such Code is amended--
(A) by striking ``In the case of a plan'' and
inserting ``In the case of a multiemployer plan'',
(B) by striking ``section 412(c)(7)'' each place it
appears and inserting ``section 431(c)(6)'',
(C) by striking ``section 412(c)(7)(B)'' and
inserting ``section 431(c)(6)(A)(ii)'',
(D) by striking ``section 412(c)(7)(A)'' and
inserting ``section 431(c)(6)(A)(i)'', and
(E) by striking ``section 412'' and inserting
``section 431''.
(3) Section 404(a)(7) of such Code, as amended by this
Act, <<NOTE: 26 USC 404.>> is amended--
(A) by adding at the end of subparagraph (A) the
following new sentence: ``In the case of a defined
benefit plan which is a single employer plan, the amount
necessary to satisfy the minimum funding standard
provided by section 412 shall not be less than the
plan's funding shortfall determined under section
430.'', and
(B) by striking subparagraph (D) and inserting:
``(D) Insurance contract plans.--For purposes of
this paragraph, a plan described in section 412(e)(3)
shall be treated as a defined benefit plan.''.
(4) Section 404A(g)(3)(A) of such Code is amended by
striking ``paragraphs (3) and (7) of section 412(c)'' and
inserting ``paragraphs (3) and (6) of section 431(c)''.
(d) Special Rule for 2006 and 2007.--
(1) In general.--Clause <<NOTE: Applicability.>> (i) of
section 404(a)(1)(D) of the Internal Revenue Code of 1986
(relating to special rule in case of certain plans) is amended
by striking ``section 412(l)'' and inserting ``section
412(l)(8)(A), except that section 412(l)(8)(A) shall be applied
for purposes of this clause by substituting `150 percent (140
percent in the case of a multiemployer plan) of current
liability' for `the current liability' in clause (i).''.
(2) Conforming amendment.--Section 404(a)(1) of the Internal
Revenue Code of 1986 is amended by striking subparagraph (F).
2004 - Pub. L. 108-218, Sec. 101(b)(5), Amends Sec. 404(a)(1)
by inserting new subpara (F) - Election to disregard modified
interest rate.
2002 - Subsec.411(v), Pub. L. 107-147, amends Sec. 404(k).
2002 - Subsec.411(s), Pub. L. 107-147, amends Sec. 404(a)(1)
(D)(iv) for Special rule.
2002 - Subsec. (a)(12). Pub. L. 107-147, Sec (l)(1), amends by
striking ``(9),'' and inserting ``(9) and subsection (h)(1)(C),''....
2002 - Subsec. (n). Pub. L. 107-147, Sec (l)(2), amends by
striking ``subsection (a),'' and inserting ``subsection (a)
or paragraph (1)(C) of subsection (h).
2002 - Subsec. (a)(7)(C). Pub. L. 107-147, Sec (l)(4), amends by
striking (a)(7))C) and replacing with new (a)(7)(C).
2001 - Subsec. (a)(1)(A). Pub. L. 107-16, Sec. 616(a)(2)(B)(i),
901, temporarily inserted ''(other than a trust to which paragraph
(3) applies)'' after ''pension trust'' in introductory provisions.
See Effective and Termination Dates of 2001 Amendment note below.
Subsec. (a)(1)(D). Pub. L. 107-16, Sec. 652(a), 901, temporarily
reenacted heading without change and amended text generally. Prior
to amendment, text read as follows: ''In the case of any defined
benefit plan (other than a multiemployer plan) which has more than
100 participants for the plan year, except as provided in
regulations, the maximum amount deductible under the limitations of
this paragraph shall not be less than the unfunded current
liability determined under section 412(l). For purposes of
determining whether a plan has more than 100 participants, all
defined benefit plans maintained by the same employer (or any
member of such employer's controlled group (within the meaning of
section 412(l)(8)(C))) shall be treated as 1 plan, but only
employees of such member or employer shall be taken into account.''
See Effective and Termination Dates of 2001 Amendment note below.
Subsec. (a)(3)(A)(i)(I). Pub. L. 107-16, Sec. 616(a)(1)(A), 901,
temporarily substituted ''25 percent'' for ''15 percent''. See
Effective and Termination Dates of 2001 Amendment note below.
Subsec. (a)(3)(A)(v). Pub. L. 107-16, Sec. 616(a)(2)(A), 901,
temporarily amended cl. (v) generally, substituting present
provisions for provisions which directed that the limitation of cl.
(i) for any taxable year would be increased by the unused pre-87
limitation carryforwards and defined ''unused pre-87 limitation
carryforwards''. See Effective and Termination Dates of 2001
Amendment note below.
Subsec. (a)(3)(B). Pub. L. 107-16, Sec. 616(b)(2)(A), 901,
temporarily struck out at end ''The term 'compensation otherwise
paid or accrued during the taxable year to all employees' shall
include any amount with respect to which an election under section
415(c)(3)(C) is in effect, but only to the extent that any
contribution with respect to such amount is nonforfeitable.'' See
Effective and Termination Dates of 2001 Amendment note below.
Subsec. (a)(10)(B). Pub. L. 107-16, Sec. 632(a)(3)(B), 901,
temporarily struck out '', the exclusion allowance under section
403(b)(2),'' after ''deferrals under section 402(g)''. See
Effective and Termination Dates of 2001 Amendment note below.
Subsec. (a)(12). Pub. L. 107-16, Sec. 616(b)(1), 901, temporarily
added par. (12). See Effective and Termination Dates of 2001
Amendment note below.
Subsec. (h)(1)(C). Pub. L. 107-16, Sec. 616(a)(1)(B), 901,
temporarily substituted ''25 percent'' for ''15 percent'' in two
places. See Effective and Termination Dates of 2001 Amendment note
below.
Subsec. (h)(2). Pub. L. 107-16, Sec. 616(a)(2)(B)(ii), (iii),
901, temporarily substituted ''certain trusts'' for ''stock bonus
and profit-sharing trust'' in heading and ''trust subject to
subsection (a)(3)(A)'' for ''stock bonus or profit-sharing trust''
in text. See Effective and Termination Dates of 2001 Amendment
note below.
Subsec. (k)(2)(A)(iii), (iv). Pub. L. 107-16, Sec. 662(a), 901,
temporarily added cl. (iii) and redesignated former cl. (iii) as
(iv). See Effective and Termination Dates of 2001 Amendment note
below.
Subsec. (k)(5)(A). Pub. L. 107-16, Sec. 662(b), 901, temporarily
inserted ''avoidance or'' before ''evasion''. See Effective and
Termination Dates of 2001 Amendment note below.
Subsec. (l). Pub. L. 107-16, Sec. 611(c)(1), 901, temporarily
substituted ''$200,000'' for ''$150,000'' in two places. See
Effective and Termination Dates of 2001 Amendment note below.
Subsec. (n). Pub. L. 107-16, Sec. 614(a), 901, temporarily added
subsec. (n). See Effective and Termination Dates of 2001 Amendment
note below.
1998 - Subsec. (a)(9)(C), (D). Pub. L. 105-206, Sec. 6015(d),
redesignated subpar. (C), relating to qualified gratuitous
transfers, as (D) and inserted heading.
Subsec. (a)(11). Pub. L. 105-206, Sec. 7001(a), added par. (11).
1997 - Subsec. (a)(3)(A)(i). Pub. L. 105-34, Sec.
1601(d)(2)(C)(i), substituted ''not in excess of the greater of -
'' and subcls. (I) and (II) for ''not in excess of 15 percent of
the compensation otherwise paid or accrued during the taxable year
to the beneficiaries under the stock bonus or profit-sharing
plan.''
Subsec. (a)(3)(A)(ii). Pub. L. 105-34, Sec. 1601(d)(2)(C)(ii),
substituted ''the amount described in subclause (I) or (II) of
clause (i), whichever is greater, with respect to such taxable
year.'' for ''15 percent of the compensation otherwise paid or
accrued during such taxable year to the beneficiaries under the
plan.''
Subsec. (a)(9)(C). Pub. L. 105-34, Sec. 1530(c)(2), added subpar.
(C) relating to qualified gratuitous transfers.
1996 - Subsec. (a)(2). Pub. L. 104-188, Sec. 1704(t)(76), struck
out ''(18),'' after ''(17),''.
Subsec. (a)(9)(C). Pub. L. 104-188, Sec. 1316(d)(1), added
subpar. (C) relating to S corporations.
Subsec. (a)(10). Pub. L. 104-188, Sec. 1461(b), added par. (10).
Subsec. (j)(1). Pub. L. 104-188, Sec. 1704(q)(1), substituted
''(9)'' for ''(10)'' in introductory provisions.
Subsec. (k)(1). Pub. L. 104-188, Sec. 1316(d)(2), substituted ''a
C corporation'' for ''a corporation''.
Subsec. (l). Pub. L. 104-188, Sec. 1431(b)(3), struck out at end
''In determining the compensation of an employee, the rules of
section 414(q)(6) shall apply, except that in applying such rules,
the term 'family' shall include only the spouse of the employee and
any lineal descendants of the employee who have not attained age 19
before the close of the year.''
Subsec. (m). Pub. L. 104-188, Sec. 1421(b)(2), added subsec. (m).
1994 - Subsec. (g)(4). Pub. L. 103-465 substituted ''the
Retirement Protection Act of 1994'' for ''the Single-Employer
Pension Plan Amendments Act of 1986''.
1993 - Subsec. (l). Pub. L. 103-66 substituted ''$150,000'' for
''$200,000'' in first sentence and ''The Secretary shall adjust the
$150,000 amount at the same time, and by the same amount, as any
adjustment under section 401(a)(17)(B).'' for ''The Secretary shall
adjust the $200,000 amount at the same time and in the same manner
as under section 415(d).''
1992 - Subsec. (a)(2). Pub. L. 102-318 substituted ''(27), and
(31)'' for ''and (27)''.
1990 - Subsec. (a)(1)(C). Pub. L. 101-508 substituted ''section
168(i)(10)(C)'' for ''section 167(l)(3)(A)(iii)''.
1989 - Subsec. (g)(1). Pub. L. 101-239, Sec. 7841(b)(1), inserted
''4041(b),'' after ''under section''.
Subsec. (k). Pub. L. 101-239, Sec. 7302(a), amended subsec. (k)
generally, substituting ''Deduction for dividends paid on certain
employer securities'' for ''Dividends paid deductions'' in heading
and pars. (1) to (6) for former pars. (1) and (2) and concluding
provisions.
1988 - Subsec. (a)(1)(D). Pub. L. 100-647, Sec. 2005(b)(3),
struck out ''(without regard to any reduction by the credit balance
in the funding standard account)'' after ''under section 412(l)''.
Pub. L. 100-647, Sec. 2005(b)(1), substituted ''For purposes of
determining whether a plan has more than 100 participants'' for
''For purposes of this subparagraph''.
Subsec. (a)(7)(A). Pub. L. 100-647, Sec. 2005(b)(2), inserted at
end ''For purposes of clause (ii), if paragraph (1)(D) applies to a
defined benefit plan for any plan year, the amount necessary to
satisfy the minimum funding standard provided by section 412 with
respect to such plan for such plan year shall not be less than the
unfunded current liability of such plan under section 412(l).''
Pub. L. 100-647, Sec. 1011A(e)(4)(A), in introductory provisions,
substituted ''foregoing paragraphs'' for ''foregoing provisions''
and inserted ''or in connection with trusts or plans described in 2
or more of such paragraphs'' after ''defined benefit plans''.
Subsec. (a)(8)(D). Pub. L. 100-647, Sec. 1018(t)(5), made
technical correction to Pub. L. 99-514, Sec. 1875(c)(7)(B), see
1986 Amendment note below.
Subsec. (h)(1)(C). Pub. L. 100-647, Sec. 1011(f)(6), inserted
''(or during the taxable year in the case of a taxable year
described in subparagraph (A)(ii))'' after ''within the taxable
year''.
Subsec. (h)(3). Pub. L. 100-647, Sec. 1011A(e)(4)(B), substituted
''Coordination with subsection (a)(7)'' for ''Effect on limit on
deductions'' in heading and amended text generally. Prior to
amendment, text read as follows: ''For any taxable year for which
the employer has a deduction under paragraph (1), the otherwise
applicable 25 percent limitations in subsection (a)(7) shall be
reduced by the amount of the allowable deductions under paragraph
(1) with respect to participants in the stock bonus or
profit-sharing trust.''
Subsec. (k). Pub. L. 100-647, Sec. 1011B(h)(3)(A), inserted
''(whether or not allocated to participants)'' after ''to employer
securities'' in par. (2)(C).
Pub. L. 100-647, Sec. 1011B(h)(6), substituted ''or as engaging
in a prohibited transaction for purposes of section 4975(d)(3)
merely by reason of any distribution or payment'' for ''merely by
reason of any distribution'' in third sentence.
Pub. L. 100-647, Sec. 1018(t)(4)(A), substituted ''evasion of
taxation'' for ''avoidance of taxation'' in fourth sentence.
Pub. L. 100-647, Sec. 1011B(h)(3)(B), inserted at end ''Paragraph
(2)(C) shall not apply to dividends from employer securities which
are allocated to any participant unless the plan provides that
employer securities with a fair market value not less than the
amount of such dividends are allocated to such participant for the
year which (but for paragraph (2)(C)) such dividends would have
been allocated to such participant.''
Subsec. (l). Pub. L. 100-647, Sec. 1011(d)(4), inserted at end
''In determining the compensation of an employee, the rules of
section 414(q)(6) shall apply, except that in applying such rules,
the term 'family' shall include only the spouse of the employee and
any lineal descendants of the employee who have not attained age 19
before the close of the year.''
Pub. L. 100-647, Sec. 1011(d)(1), inserted at end ''For purposes
of clause (i), (ii), or (iii) of subsection (a)(1)(A), and in
computing the full funding limitation, any adjustment under the
preceding sentence shall not be taken into account for any year
before the year for which such adjustment first takes effect.''
1987 - Subsec. (a)(1)(A)(iii). Pub. L. 100-203, Sec. 9307(d),
inserted ''the unfunded costs attributable to'' after ''to
amortize''.
Subsec. (a)(1)(D), (E). Pub. L. 100-203, Sec. 9307(c), added
subpar. (D) and redesignated former subpar. (D) as (E).
Subsec. (a)(5). Pub. L. 100-203, Sec. 10201(b)(3), inserted at
end ''For purposes of this section, any vacation pay which is
treated as deferred compensation shall be deductible for the
taxable year of the employer in which paid to the employee.''
Subsec. (b)(2)(B). Pub. L. 100-203, Sec. 10201(b)(2), substituted
''Exception'' for ''Exception for certain benefits'' in heading and
amended text generally. Prior to amendment, text read as follows:
''Subparagraph (A) shall not apply to -
''(i) any benefit provided through a welfare benefit fund (as
defined in section 419(e)), or
''(ii) any benefit with respect to which an election under
section 463 applies.''
1986 - Subsec. (a). Pub. L. 99-514, Sec. 1851(b)(2)(C)(i),
substituted ''this chapter; but, if they would otherwise be
deductible'' for ''section 162 (relating to trade or business
expenses) or section 212 (relating to expenses for the production
of income); but, if they satisfy the conditions of either of such
sections''.
Subsec. (a)(2). Pub. L. 99-514, Sec. 1136(b), substituted ''(26),
and (27)'' for ''and (26)''.
Pub. L. 99-514, Sec. 1112(d)(2), substituted ''(22), and (26)''
for ''and (22)''.
Subsec. (a)(3)(A). Pub. L. 99-514, Sec. 1131(a), amended subpar.
(A) generally, revising and restating as cls. (i) to (v) provisions
formerly contained in single paragraph.
Subsec. (a)(7). Pub. L. 99-514, Sec. 1131(b), amended par. (7)
generally, revising and restating as subpars. (A) to (C) provisions
formerly contained in single paragraph, and adding subpar. (D).
Subsec. (a)(8)(C). Pub. L. 99-514, Sec. 1875(c)(7)(A), inserted
''(determined without regard to the deductions allowed by this
section)''.
Subsec. (a)(8)(D). Pub. L. 99-514, Sec. 1875(c)(7)(B), as amended
by Pub. L. 100-647, Sec. 1018(t)(5), struck out ''(determined
without regard to the deductions allowed by this section)'' after
''earned income of such individual''.
Pub. L. 99-514, Sec. 1848(c), substituted ''the deduction allowed
by this section'' for ''the deductions allowed by this section and
section 405(c)''.
Subsec. (b). Pub. L. 99-514, Sec. 1851(b)(2)(B)(i), substituted
''certain'' for ''unfunded'' in heading.
Subsec. (b)(2). Pub. L. 99-514, Sec. 1851(b)(2)(A), (B)(ii),
substituted ''certain'' for ''unfunded'' in heading, and in subpar.
(B)(ii), substituted ''any benefit'' for ''to any benefit''.
Subsec. (d). Pub. L. 99-514, Sec. 1851(b)(2)(C)(ii), substituted
''under this chapter'' for ''under section 162 or 212'' in pars.
(1) and (2).
Subsec. (g)(3). Pub. L. 99-272, Sec. 11011(c)(1), amended par.
(3) generally. Prior to the amendment, par. (3), coordination with
subsection (a), read as follows: ''Any payment described in
paragraph (1) shall (subject to the last sentence of subsection
(a)(1)(A)) be deductible under this section when paid.''
Subsec. (g)(4). Pub. L. 99-272, Sec. 11011(c)(2), added par. (4).
Subsec. (h)(1)(A), (B). Pub. L. 99-514, Sec. 1108(c), amended
subpars. (A) and (B) generally. Prior to amendment, subpars. (A)
and (B) read as follows:
''(A) Contributions made for a calendar year are deductible for
the taxable year with which or within which the calendar year ends.
''(B) Contributions made within 3 1/2 months after the close of a
calendar year are treated as if they were made on the last day of
such calendar year if they are made on account of such calendar
year.''
Subsec. (i). Pub. L. 99-514, Sec. 1171(b)(6), struck out subsec.
(i) relating to the deductibility of unused portions of employee
stock ownership credit.
Subsec. (k). Pub. L. 99-514, Sec. 1854(b)(2)(B), struck out
''during the taxable year'' after ''cash by such corporation'' in
introductory provisions.
Pub. L. 99-514, Sec. 1854(b)(4), inserted ''The Secretary may
disallow the deduction under this subsection for any dividend if
the Secretary determines that such dividend constitutes, in
substance, an avoidance of taxation.''
Pub. L. 99-514, Sec. 1854(b)(3), inserted ''A plan to which this
subsection applies shall not be treated as violating the
requirements of section 401, 409, or 4975(e)(7) merely by reason of
any distribution described in paragraph (2).''
Pub. L. 99-514, Sec. 1854(b)(2)(A), inserted ''Any deduction
under subparagraph (A) or (B) of paragraph (2) shall be allowed in
the taxable year of the corporation in which the dividend is paid
or distributed to the participant under paragraph (2).''
Pub. L. 99-514, Sec. 1173(a)(2), inserted ''Any deduction under
paragraph (2)(C) shall be allowable in the taxable year of the
corporation in which the dividend is used to repay the loan
described in such paragraph.''
Subsec. (k)(2)(A), (B). Pub. L. 99-514, Sec. 1854(b)(5), inserted
''or their beneficiaries''.
Subsec. (k)(2)(C). Pub. L. 99-514, Sec. 1173(a)(1), added subpar.
(C).
Subsec. (l). Pub. L. 99-514, Sec. 1106(d)(2), added subsec. (l).
1984 - Subsec. (a)(8)(D). Pub. L. 98-369, Sec. 713(d)(6),
inserted ''(determined without regard to the deductions allowed by
this section and section 405(c))''.
Subsec. (a)(9), (10). Pub. L. 98-369, Sec. 713(d)(4)(A), struck
out par. (9) relating to plans benefiting self-employed individuals
and redesignated par. (10) as (9).
Subsec. (b). Pub. L. 98-369, Sec. 512(a), amended subsec. (b)
generally, inserting heading, redesignating former heading as par.
(1) heading, designating existing provisions as par. (1), and in
par. (1) as so designated, inserted ''(including a plan described
in paragraph (2))'' after ''compensation'' and adding par. (2).
Subsec. (e). Pub. L. 98-369, Sec. 713(d)(9), substituted ''under
paragraph (1), (2), or (3) of subsection (a)'' for ''under this
section''.
Subsec. (f). Pub. L. 98-369, Sec. 713(b)(3), repealed subsec. (f)
which related to certain loan repayments considered as
contributions.
Subsec. (h)(4). Pub. L. 98-369, Sec. 713(d)(5), repealed par. (4)
which related to effect on self-employed individuals or
shareholder-employees.
Subsec. (i). Pub. L. 98-369, Sec. 474(r)(14), in par. (1),
substituted ''If any portion of the employee stock ownership credit
determined under section 41 for any taxable year has not, after the
application of section 38(c), been allowed under section 38 for any
taxable year, such portion shall be allowed as a deduction (without
regard to any limitations provided under this section) for the last
taxable year to which such portion could have been allowed as a
credit under section 39'' for ''There shall be allowed as a
deduction (without regard to any limitations provided under this
section) for the last taxable year to which an unused employee
stock ownership credit carryover (within the meaning of section
44G(b)(2)(A)) may be carried, an amount equal to the portion of
such unused credit carryover which expires at the close of such
taxable year'', and in par. (2), substituted references to section
41 and 41(c)(3) for references to section 44G and 44G(c)(3),
respectively.
Subsec. (k). Pub. L. 98-369, Sec. 542(a), added subsec. (k).
1982 - Subsec. (a)(2). Pub. L. 97-248, Sec. 237(e)(2),
substituted ''(8), (9)'' for ''(8)'', and ''401(a)(10) and of
section 401(d)'' for ''401(a)(9), (10), (17), and (18) and of
section 401(d) (other than paragraph (1))''.
Subsec. (a)(3)(B). Pub. L. 97-248, Sec. 253(b), inserted
provision that ''compensation otherwise paid or accrued during the
taxable year to all employees'' shall include any amount with
respect to which an election under section 415(c)(3)(C) is in
effect, but only to the extent that any contribution with respect
to such amount is nonforfeitable.
Subsec. (e). Pub. L. 97-248, Sec. 238(a), amended subsec. (e)
generally, substituting provisions relating to contributions
allocable to life insurance protection for self-employed
individuals, for provisions relating to general requirements,
contributions made under more than one plan, contributions
allocable to insurance protection, and limitations of not lower
than $750 or 100 percent of earned income with respect to special
limitations for self-employed individuals.
Subsec. (j). Pub. L. 97-248, Sec. 235(f), added subsec. (j).
1981 - Subsec. (a)(10). Pub. L. 97-34, Sec. 333(a), added par.
(10).
Subsec. (e). Pub. L. 97-34, Sec. 312(a), substituted in pars. (1)
and (2)(A) ''$15,000'' for ''$7,500''.
Subsec. (i). Pub. L. 97-34, Sec. 331(b), added subsec. (i).
1980 - Subsec. (g). Pub. L. 96-364 redesignated existing
provisions as par. (1), inserted applicability to part 1 of
subtitle E of title IV of Employee Retirement Income Security Act
of 1974, and added pars. (2) and (3).
Subsec. (h). Pub. L. 96-222 inserted ''or shareholder employees''
after ''individuals'' in heading, and in par. (4) ''or described in
section 1379(b)(1)'' after ''of subsection (e)'' and ''or a
shareholder-employee (as defined in section 1379(d))'' after
''section 401(c)(1)'' and substituted in pars. (2) to (4)
''paragraph (1)'' for ''subparagraph (1)''.
1978 - Subsec. (a)(2). Pub. L. 95-600, Sec. 141(f)(9),
substituted ''(20), and (22)'' for ''and (20)''.
Subsec. (b). Pub. L. 95-600, Sec. 133(b), substituted ''other
plan'' for ''similar plan''.
Subsec. (d). Pub. L. 95-600, Sec. 133(a), added subsec. (d).
Subsec. (h). Pub. L. 95-600, Sec. 152(f), added subsec. (h).
1976 - Subsecs. (a)(1)(B), (8)(C). Pub. L. 94-455, Sec.
1906(b)(13)(A), struck out ''or his delegate'' after ''Secretary''.
Subsec. (a)(2). Pub. L. 94-267 substituted ''(19), and (20)'' for
''and (19)''.
Subsec. (d). Pub. L. 94-455, Sec. 1901(a)(59), struck out subsec.
(d) which related to the taxability of the beneficiary under
certain forfeitable contracts purchased by exempt organizations.
Subsecs. (e)(2)(B), (3). Pub. L. 94-455, Sec. 1906(b)(13)(A),
struck out ''or his delegate'' after ''Secretary''.
Subsec. (e)(4). Pub. L. 94-455, Sec. 1502(a)(2), inserted
provisions following subpar. (B).
1974 - Subsec. (a)(1). Pub. L. 93-406, Sec. 1013(c)(1), expanded
subpars. (A), (B), and (C) to accommodate the increased minimum
funding standards required by section 412.
Subsec. (a)(2). Pub. L. 93-406, Sec. 1016(a)(3), 2001(g)(2)(E),
2004(c)(1), inserted references to the requirements of section
401(a)(11), (12), (13), (14), (15), (16), (17), (18), and (19),
and, if applicable, the requirements of section 401(a)(17) and
(18).
Subsec. (a)(3)(A). Pub. L. 93-406, Sec. 2004(b), inserted '', but
the amount so deductible under this sentence in any one succeeding
taxable year together with the amount so deductible under the first
sentence of this subparagraph shall not exceed 25 percent of the
compensation otherwise paid or accrued during such taxable year to
the beneficiaries under the plan'' after ''If in any taxable year
there is paid into the trust, or a similar trust then in effect,
amounts less than the amounts deductible under the preceding
sentence, the excess, or if no amount is paid, the amounts
deductible, shall be carried forward and be deductible when paid in
the succeeding taxable years in order of time, but the amount so
deductible under this sentence in any such succeeding taxable year
shall not exceed 15 percent of the compensation otherwise paid or
accrued during such succeeding taxable year to the beneficiaries
under the plan''.
Subsec. (a)(6). Pub. L. 93-406, Sec. 1013(c)(2), substituted
provisions covering only taxpayers operating on the accrual basis
for provisions covering the time when contributions shall be deemed
made.
Subsec. (a)(7). Pub. L. 93-406, Sec. 1013(c)(3), inserted
reference to the amount of contributions made to or under the
trusts or plans to the extent such contributions do not exceed the
amount of employer contributions necessary to satisfy the minimum
funding standards provided by section 412 for the plan year which
ends with or within such taxable year (or for any prior plan year)
and substituted ''25 percent'' for ''30 percent'' in provision
covering amounts paid into trusts or under an annuity plan in any
taxable year in excess of the amount allowable with respect to such
year.
Subsec. (a)(9)(B)(ii). Pub. L. 93-406, Sec. 2001(g)(2)(F),
substituted ''the second sentence of paragraph (3)'' for
''paragraph (1)(D), the second and third sentences of paragraph
(3), and the second sentence of paragraph (7)''.
Subsec. (c). Pub. L. 93-406, Sec. 2008(a), (b), substituted ''or
pensions'' for ''and pensions'' in par. (1), substituted ''The
first and third sentences of this subsection'' for ''This
subsection'' in provisions covering amounts contributed to a trust
on or after any date on which such trust is qualified for exemption
from tax under section 501(a), inserted provisions setting out
specified treatment to be accorded individuals who before July 1,
1974, were participants in plans described in the subsections, and
inserted provision that section 277 (relating to deductions
incurred by certain membership organizations in transactions with
members) does not apply to any trust described in the subsection.
Subsec. (e)(1). Pub. L. 93-406, Sec. 2001(a)(1), substituted
''subject to paragraphs (2) and (4), not exceed $7,500, or 15
percent'' for ''subject to the provisions of paragraph (2), not
exceed $2,500, or 10 percent''.
Subsec. (e)(2)(A). Pub. L. 93-406, Sec. 2001(a)(2), substituted
''shall (subject to paragraph (4)) not exceed $7,500, or 15
percent'' for ''shall not exceed $2,500 or 10 percent''.
Subsec. (e)(4). Pub. L. 93-406, Sec. 2001(a)(3), added par. (4).
Subsec. (g). Pub. L. 93-406, Sec. 4081(a), added subsec. (g).
1969 - Subsec. (a)(5). Pub. L. 91-172 substituted ''If the plan
is not one included in paragraph (1), (2), or (3), in the taxable
year in which an amount attributable to the contribution is
includible in the gross income of employees participating in the
plan, but, in the case of a plan in which more than one employee
participates only if separate accounts are maintained for each
employee'' for ''In the taxable year when paid, if the plan is not
one included in paragraph (1), (2), or (3), if the employees'
rights to or derived from such employer's contribution or such
compensation are nonforfeitable at the time the contribution or
compensation is paid''.
1966 - Subsec. (a). Pub. L. 89-809, Sec. 204(a), repealed par.
(10) which provided for a special limitation on the amount allowed
as a deduction for self-employed individuals.
Subsec. (e). Pub. L. 89-809, Sec. 204(b)(2), (3), struck out
references to par. (10) of subsec. (a) wherever appearing.
1962 - Subsec. (a)(2). Pub. L. 87-863 inserted '', or retirement
annuities and medical benefits as described in section 401(h),''
after ''purchase of retirement annuities'', and '', or such
retirement annuities and medical benefits'' after ''such retirement
annuities.''
Pub. L. 87-792, Sec. 3(a)(1), substituted ''(5), (6), (7), and
(8), and, if applicable, the requirements of section 401(a)(9) and
(10) and of section 401(d) (other than paragraph (1)),'' for ''(5),
and (6),''.
Subsecs. (a)(8) to (10). Pub. L. 87-792, Sec. 3(a)(2), added
pars. (8) to (10).
Subsecs. (e), (f). Pub. L. 87-792, Sec. 3(b), added subsecs. (e)
and (f).
1958 - Subsec. (a). Pub. L. 85-866 substituted ''income); but,
if'' for ''income) but if'' preceding par. (1).
EFFECTIVE AND TERMINATION DATES OF 2001 AMENDMENT
Amendment by section 611(c)(1) of Pub. L. 107-16 applicable to
years beginning after Dec. 31, 2001, see section 611(i)(1) of Pub.
L. 107-16, set out as a note under section 415 of this title.
Pub. L. 107-16, title VI, Sec. 614(b), June 7, 2001, 115 Stat.
102, provided that: ''The amendment made by this section (amending
this section) shall apply to years beginning after December 31,
2001.''
Pub. L. 107-16, title VI, Sec. 616(c), June 7, 2001, 115 Stat.
103, provided that: ''The amendments made by this section (amending
this section and section 4972 of this title) shall apply to years
beginning after December 31, 2001.''
Amendment by section 632(a)(3)(B) of Pub. L. 107-16 applicable to
years beginning after Dec. 31, 2001, see section 632(a)(4) of Pub.
L. 107-16, set out as a note under section 72 of this title.
Pub. L. 107-16, title VI, Sec. 652(c), June 7, 2001, 115 Stat.
130, provided that: ''The amendments made by this section (amending
this section and section 4972 of this title) shall apply to plan
years beginning after December 31, 2001.''
Pub. L. 107-16, title VI, Sec. 662(c), June 7, 2001, 115 Stat.
142, provided that: ''The amendments made by this section (amending
this section) shall apply to taxable years beginning after December
31, 2001.''
Amendment by Pub. L. 107-16 inapplicable to taxable, plan, or
limitation years beginning after Dec. 31, 2010, and the Internal
Revenue Code of 1986 to be applied and administered to such years
as if such amendment had never been enacted, see section 901 of
Pub. L. 107-16, set out as a note under section 1 of this title.
EFFECTIVE DATE OF 2006 AMENDMENT
2006 - Pension Protection Act of 2006 (P.L. 109-280)
Section 803(d) <<NOTE: 26 USC 404 note.>> Effective Date.--The amendments made
by this section shall apply to contributions for taxable years beginning
after December 31, 2005.
EFFECTIVE DATE OF 2006 AMENDMENT
2006 - Pension Protection Act of 2006 (P.L. 109-280)
SEC. 802. DEDUCTION LIMITS FOR MULTIEMPLOYER PLANS.
(b) <<NOTE: 26 USC 404 note.>> Effective Date.--The amendment made
by subsection (a) shall apply to years beginning after December 31,
2007.
EFFECTIVE DATE OF 2006 AMENDMENT
2006 - Pension Protection Act of 2006 (P.L. 109-280)
Section 801(e) <<NOTE: 26 USC 404 note.>> Effective Dates.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to years beginning
after December 31, 2007.
(2) Special rules.--The amendments made by subsection (d)
shall apply to years beginning after December 31, 2005.
EFFECTIVE DATE OF 2004 AMENDMENT
Effective <<NOTE: 26 USC 404 note.>> Dates.--
(1) In general.--Except <<NOTE: Applicability.>> as provided
in paragraphs (2) and (3), the amendments made by this section
shall apply to plan years beginning after December 31, 2003.
(2) Lookback rules.--For purposes of applying subsections
(d)(9)(B)(ii) and (e)(1) of section 302 of the Employee
Retirement Income Security Act of 1974 and subsections
(l)(9)(B)(ii) and (m)(1) of section 412 of the Internal Revenue
Code of 1986 to plan years beginning after December 31, 2003,
the amendments made by this section may be applied as if such
amendments had been in effect for all prior plan years. The
Secretary of the Treasury may prescribe simplified assumptions
which may be used in applying the amendments made by this
section to such prior plan years.
(3) Transition rule for section 415 limitation.--In the case
of any participant or beneficiary receiving a distribution after
December 31, 2003 and before January 1, 2005, the amount payable
under any form of benefit subject to section 417(e)(3) of the
Internal Revenue Code of 1986 and subject to adjustment under
section 415(b)(2)(B) of such Code shall not, solely by reason of
the amendment made by subsection (b)(4), be less than the amount
that would have been so payable had the amount payable been
determined using the applicable interest rate in effect as of
the last day of the last plan year beginning before January 1, 2004.
EFFECTIVE DATE OF 1998 AMENDMENT
Amendment by section 6015(d) of Pub. L. 105-206 effective, except
as otherwise provided, as if included in the provisions of the
Taxpayer Relief Act of 1997, Pub. L. 105-34, to which such
amendment relates, see section 6024 of Pub. L. 105-206, set out as
a note under section 1 of this title.
Pub. L. 105-206, title VII, Sec. 7001(b), July 22, 1998, 112
Stat. 827, provided that:
''(1) In general. - The amendment made by subsection (a)
(amending this section) shall apply to taxable years ending after
the date of the enactment of this Act (July 22, 1998).
''(2) Change in method of accounting. - In the case of any
taxpayer required by the amendment made by subsection (a) (amending
this section) to change its method of accounting for its first
taxable year ending after the date of the enactment of this Act
(July 22, 1998) -
''(A) such change shall be treated as initiated by the
taxpayer,
''(B) such change shall be treated as made with the consent of
the Secretary of the Treasury; and
''(C) the net amount of the adjustments required to be taken
into account by the taxpayer under section 481 of the Internal
Revenue Code of 1986 shall be taken into account ratably over the
3-taxable year period beginning with such first taxable year.''
EFFECTIVE DATE OF 1997 AMENDMENT
Amendment by section 1530(c)(2) of Pub. L. 105-34 applicable to
transfers made by trusts to, or for the use of, an employee stock
ownership plan after Aug. 5, 1997, see section 1530(d) of Pub. L.
105-34, set out as a note under section 401 of this title.
Amendment by section 1601(d)(2)(C) of Pub. L. 105-34 effective as
if included in the provisions of the Small Business Job Protection
Act of 1996, Pub. L. 104-188, to which it relates, see section
1601(j) of Pub. L. 105-34, set out as a note under section 23 of
this title.
EFFECTIVE DATE OF 1996 AMENDMENT
Amendment by section 1316(d)(1), (2) of Pub. L. 104-188
applicable to taxable years beginning after Dec. 31, 1997, see
section 1316(f) of Pub. L. 104-188, set out as a note under section
170 of this title.
Amendment by section 1421(b)(2) of Pub. L. 104-188 applicable to
taxable years beginning after Dec. 31, 1996, see section 1421(e) of
Pub. L. 104-188, set out as a note under section 72 of this title.
Amendment by section 1431(b)(3) of Pub. L. 104-188 applicable to
years beginning after Dec. 31, 1996, see section 1431(d)(2) of Pub.
L. 104-188, set out as a note under section 414 of this title.
Section 1461(c) of Pub. L. 104-188 provided that: ''The
amendments made by this section (amending this section and section
1414 of this title) shall apply to years beginning after December
31, 1996.''
Section 1704(q)(2) of Pub. L. 104-188 provided that: ''The
amendment made by paragraph (1) (amending this section) shall take
effect as if included in the amendments made by section
713(d)(4)(A) of the Deficit Reduction Act of 1984 (Pub. L.
98-369).''
EFFECTIVE DATE OF 1993 AMENDMENT
Amendment by Pub. L. 103-66 applicable, except as otherwise
provided, to benefits accruing in plan years beginning after Dec.
31, 1993, see section 13212(d) of Pub. L. 103-66, set out as a note
under section 401 of this title.
EFFECTIVE DATE OF 1992 AMENDMENT
Amendment by Pub. L. 102-318 applicable, except as otherwise
provided, to distributions after Dec. 31, 1992, see section 522(d)
of Pub. L. 102-318, set out as a note under section 401 of this
title.
EFFECTIVE DATE OF 1990 AMENDMENT
Amendment by Pub. L. 101-508 applicable to property placed in
service after Nov. 5, 1990, but not applicable to any property to
which section 168 of this title does not apply by reason of subsec.
(f)(5) of section 168, and not applicable to rehabilitation
expenditures described in section 252(f)(5) of Pub. L. 99-514, see
section 11812(c) of Pub. L. 101-508, set out as a note under
section 42 of this title.
EFFECTIVE DATE OF 1989 AMENDMENT
Section 7302(b) of Pub. L. 101-239 provided that:
''(1) In general. - The amendment made by this section (amending
this section) shall apply to employer securities acquired after
August 4, 1989.
''(2) Securities acquired with certain loans. - The amendment
made by this section shall not apply to employer securities
acquired after August 4, 1989, which are acquired -
''(A) with the proceeds of any loan which was made pursuant to
a binding written commitment in effect on August 4, 1989, and at
all times thereafter before such loan is made, and
''(B) pursuant to a written binding contract (or tender offer
registered with the Securities and Exchange Commission) in effect
on August 4, 1989, and at all times thereafter before such
securities are acquired.''
Section 7841(b)(2) of Pub. L. 101-239 provided that: ''The
amendment made by paragraph (1) (amending this section) shall apply
to payments made after January 1, 1986, in taxable years ending
after such date.''
EFFECTIVE DATE OF 1988 AMENDMENT
Amendment by sections 1011(d)(1), (4), (f)(6), 1011A(e)(4),
1011B(h)(3), (6), and 1018(t)(4)(A), (5) of 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.
Section 2005(e) of Pub. L. 100-647, as amended by Pub. L.
101-239, title VII, Sec. 7812(d), Dec. 19, 1989, 103 Stat. 2412,
provided that: ''The amendments made by this section (amending this
section and sections 412, 414, and 4972 of this title and section
1082 of Title 29, Labor) shall take effect as if included in the
amendments made by the provisions of the Omnibus Budget
Reconciliation Act of 1987 (Pub. L. 100-203) to which it relates,
except that the amendment made by subsection (a)(1) (amending
section 4972 of this title) shall take effect as if included in the
amendment made by section 1131(c) of the Tax Reform Act of 1986
(Pub. L. 99-514).''
EFFECTIVE DATE OF 1987 AMENDMENT
Section 9307(f) of Pub. L. 100-203, as amended by Pub. L.
101-239, title VII, Sec. 7881(d)(3), Dec. 19, 1989, 103 Stat. 2439,
provided that:
''(1) In general. - Except as provided in paragraph (2), the
amendments made by this section (amending this section and section
412 of this title and section 1082 of Title 29, Labor) shall apply
to years beginning after December 31, 1987.
''(2) Amortization of gains and losses. - Sections
412(b)(2)(B)(iv) and 412(b)(3)(B)(ii) of the Internal Revenue Code
of 1986 and sections 302(b)(2)(B)(iv) and 302(b)(3)(B)(ii) of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1082(b)(2)(B)(iv), (3)(B)(ii)) (as amended by paragraphs (1)(A) and
(2)(A) of subsection (a)) shall apply to gains and losses
established in years beginning after December 31, 1987. For
purposes of the preceding sentence, any gain or loss determined by
a valuation occurring as of January 1, 1988, shall be treated as
established in years beginning before 1988, or at the election of
the employer, shall be amortized in accordance with Internal
Revenue Service Notice 89-52.''
Section 10201(c)(1) of Pub. L. 100-203 provided that: ''The
amendments made by this section (amending this section and sections
419 and 461 of this title, and repealing sections 81 and 463 of
this title) shall apply to taxable years beginning after December
31, 1987.''
EFFECTIVE DATE OF 1986 AMENDMENTS
Amendment by section 1106(d)(2) of Pub. L. 99-514 applicable to
benefits accruing in years beginning after Dec. 31, 1988, except as
otherwise provided, see section 1106(i)(5) of Pub. L. 99-514, set
out as a note under section 415 of this title.
Amendment by section 1108(c) of Pub. L. 99-514 applicable to
years beginning after Dec. 31, 1986, see section 1108(h) of Pub. L.
99-514, set out as a note under section 219 of this title.
Amendment by section 1112(d)(2) of Pub. L. 99-514 applicable to
plan years beginning after Dec. 31, 1988, with special rule
regarding collective bargaining agreements ratified before Mar. 1,
1986, and with provision for waiver of excise tax on reversions,
see section 1112(e) of Pub. L. 99-514, set out as a note under
section 401 of this title.
Section 1131(d) of Pub. L. 99-514, as amended by Pub. L. 100-647,
title I, Sec. 1011A(e)(3), Nov. 10, 1988, 102 Stat. 3478, provided
that:
''(1) In general. - Except as provided in paragraph (2), the
amendments made by this section (enacting section 4972 of this
title and amending this section) shall apply to taxable years
beginning after December 31, 1986.
''(2) Special rules for collective bargaining agreements. - In
the case of a plan maintained pursuant to 1 or more collective
bargaining agreements between employee representatives and 1 or
more employers ratified before March 1, 1986, the amendments made
by this section shall not apply to contributions pursuant to any
such agreement for taxable years beginning before the earlier of -
''(A) January 1, 1989, or
''(B) the date on which the last of such collective bargaining
agreements terminates (determined without regard to any extension
thereof after February 28, 1986).''
Amendment by section 1171(b)(6) of Pub. L. 99-514 applicable to
compensation paid or accrued after Dec. 31, 1986, in taxable years
ending after such date, but this section 404(i) of this title to
continue to apply with respect to credits under section 41 of this
title attributable to compensation paid or accrued before Jan. 1,
1987 (or under section 38 of this title with respect to qualified
investment before Jan. 1, 1983), see section 1171(c) of Pub. L.
99-514, set out as a note under section 38 of this title.
Section 1173(c)(1) of Pub. L. 99-514 provided that: ''The
amendments made by subsection (a) (amending this section) shall
apply to dividends paid in taxable years beginning after the date
of the enactment of this Act (Oct. 22, 1986).''
Amendment by sections 1848(c), 1851(b)(2)(A)-(C)(ii), and
1854(b)(3)-(5) of Pub. L. 99-514 effective, except as otherwise
provided, as if included in the provisions of the Tax Reform Act of
1984, Pub. L. 98-369, div. A, to which such amendment relates, see
section 1881 of Pub. L. 99-514, set out as a note under section 48
of this title.
Amendment by section 1854(b)(2) of Pub. L. 99-514 not applicable
to dividends paid before Jan. 1, 1986, if the taxpayer treated such
dividends in a manner inconsistent with such amendment on a return
filed with the Secretary before Oct. 22, 1986, see section
1854(b)(6) of Pub. L. 99-514, set out as a note under section 72 of
this title.
Section 1875(c)(7)(B) of Pub. L. 99-514 provided that the
amendment made by that section is effective with respect to taxable
years beginning after Dec. 31, 1984.
Section 11011(c)(3) of Pub. L. 99-272 provided that: ''The
amendments made by this subsection (amending this section) shall
apply to payments made after January 1, 1986, in taxable years
ending after such date.''
EFFECTIVE DATE OF 1984 AMENDMENT
Amendment by section 474(r)(14) of Pub. L. 98-369 applicable to
taxable years beginning after Dec. 31, 1983, and to carrybacks from
such years, see section 475(a) of Pub. L. 98-369, set out as a note
under section 21 of this title.
Section 512(c) of Pub. L. 98-369 provided that:
''(1) In general. - Except as provided in paragraph (2), the
amendments made by this section (amending this section and section
162 of this title) shall apply to amounts paid or incurred after
the date of the enactment of this Act (July 18, 1984) in taxable
years ending after such date.
''(2) Exception for certain extended vacation pay plans. - In the
case of any extended vacation pay plan maintained pursuant to a
collective bargaining agreement -
''(A) between employee representatives and 1 or more employers,
and
''(B) in effect on June 22, 1984,
the amendments made by this section shall not apply before the date
on which such collective bargaining agreement terminates
(determined without regard to any extension thereof agreed to after
June 22, 1984). For purposes of the preceding sentence, any plan
amendment made pursuant to a collective bargaining agreement
relating to the plan which amends the plan solely to conform to any
requirement added by this section shall not be treated as a
termination of such collective bargaining agreement.''
Section 542(d) of Pub. L. 98-369 provided that: ''The amendments
made by this section (amending this section and sections 116 and
3405 of this title) shall apply to taxable years beginning after
the date of enactment of this Act (July 18, 1984).''
Amendment by section 713 of Pub. L. 98-369 effective as if
included in the provision of the Tax Equity and Fiscal
Responsibility Act of 1982, Pub. L. 97-248, to which such amendment
relates, see section 715 of Pub. L. 98-369, set out as a note under
section 31 of this title.
EFFECTIVE DATE OF 1982 AMENDMENT
Section 253(c) of Pub. L. 97-248 provided that: ''The amendments
made by this section (amending this section and section 415 of this
title) shall apply to taxable years beginning after December 31,
1981.''
Amendment by section 235(f) of Pub. L. 97-248, in the case of any
plan which is not in existence on July 1, 1982, applicable to years
ending after July 1, 1982, and in the case of any plan which is in
existence on July 1, 1982, applicable to years beginning after Dec.
31, 1982, see section 235(g)(1) of Pub. L. 97-248, set out as a
note under section 415 of this title.
Amendment by sections 237 and 238 of Pub. L. 97-248 applicable to
years beginning after Dec. 31, 1983, see section 241 of Pub. L.
97-248, set out as an Effective Date note under section 416 of this
title.
EFFECTIVE DATE OF 1981 AMENDMENT
Amendment by section 312(a) of Pub. L. 97-34 applicable to plans
which include employees within the meaning of section 401(c)(1) of
this title with respect to taxable years beginning after Dec. 31,
1981, see section 312(f)(1) of Pub. L. 97-34, set out as a note
under section 72 of this title.
Section 331(f)(2) of Pub. L. 97-34 provided that: ''The
amendments made by subsections (b) and (c) (amending this section
and sections 56, 409A, and 6699 of this title) shall apply to
taxable years ending after December 31, 1982.''
EFFECTIVE DATE OF 1980 AMENDMENTS
Amendment by Pub. L. 96-364 effective Sept. 26, 1980, see section
210(a) of Pub. L. 96-364, set out as an Effective Date note under
section 418 of this title.
Amendment by Pub. L. 96-222 effective, except as otherwise
provided, as if it had been included in the provisions of the
Revenue Act of 1978, Pub. L. 95-600, to which such amendment
relates, see section 201 of Pub. L. 96-222, set out as a note under
section 32 of this title.
EFFECTIVE DATE OF 1978 AMENDMENT
Section 133(c) of Pub. L. 95-600, as amended by Pub. L. 96-222,
title I, Sec. 101(a)(5), Apr. 1, 1980, 94 Stat. 196; Pub. L.
99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that:
''(1) In general. - Except as provided in paragraph (2), the
amendments made by this section (amending this section) shall apply
to deductions for taxable years beginning after December 31, 1978.
''(2) Special rule for certain title insurance companies. -
''(A) In general. - In the case of a qualified title insurance
company plan, the amendment made by subsection (a) (amending this
section) shall apply to deductions for taxable years beginning
after December 31, 1979.
''(B) Qualified title insurance company plan. - For purposes of
subparagraph (A), the term 'qualified title insurance company
plan' means a plan of a qualified title insurance company -
''(i) which defers the payment of amounts credited by such
company to separate accounts for members of such company in
consideration of their issuance of policies of title insurance,
and
''(ii) under which no part of such amounts is payable to or
withdrawable by the members until after the period for the
adverse possession of real property under applicable State law.
''(C) Qualified title insurance company. - For purposes of
subparagraph (B), the term 'qualified title insurance company'
means an unincorporated title insurance company organized as a
business trust -
''(i) which is engaged in the business of providing title
insurance coverage on interests in and liens upon real property
obtained by clients of the members of such company, and
''(ii) which is subject to tax under section 831 of the
Internal Revenue Code of 1986 (formerly I.R.C. 1954).''
Amendment by section 141(f)(9) of Pub. L. 95-600 effective with
respect to qualified investment for taxable years beginning after
Dec. 31, 1978, see section 141(g)(1) of Pub. L. 95-600, set out as
an Effective Date note under section 409 of this title.
Amendment by section 152(f) of Pub. L. 95-600 applicable to
taxable years beginning after Dec. 31, 1978, see section 152(h) of
Pub. L. 95-600, set out as a note under section 408 of this title.
EFFECTIVE DATE OF 1976 AMENDMENTS
Amendment by section 1502(a)(2) of Pub. L. 94-455 effective for
taxable years beginning after Dec. 31, 1975, see section 1502(b) of
Pub. L. 94-455, set out as a note under section 415 of this title.
Amendment by section 1901(a)(59) of Pub. L. 94-455 effective for
taxable years beginning after Dec. 31, 1976, see section 1901(d) of
Pub. L. 94-455, set out as a note under section 2 of this title.
Amendment by Pub. L. 94-267 applicable with respect to payments
made to an employee on or after July 4, 1974, see section 1(e) of
Pub. L. 94-267, set out as a note under section 401 of this title.
EFFECTIVE DATE OF 1974 AMENDMENT
Amendment by sections 1013(c) and 1016(a)(3) of Pub. L. 93-406
applicable, except as otherwise provided in section 1017(c) through
(i) of Pub. L. 93-406, for plan years beginning after Sept. 2,
1974, but, in the case of plans in existence on Jan. 1, 1974,
amendment by sections 1013(c) and 1016(a)(3) of Pub. L. 93-406
applicable for plan years beginning after Dec. 31, 1975, see
section 1017 of Pub. L. 93-406, set out as an Effective Date;
Transitional Rules note under section 410 of this title.
Section 2001(i)(1) of Pub. L. 93-406 provided that: ''The
amendments made by subsections (a) (amending this section) and (b)
(amending section 1379 of this title) apply to taxable years
beginning after December 31, 1973.''
Amendment by section 2001(g)(2)(E), (F) of Pub. L. 93-406
applicable to distributions made in taxable years beginning after
Dec. 31, 1975, see section 2001(i)(5) of Pub. L. 93-406, set out as
a note under section 72 of this title.
Section 2008(c) of Pub. L. 93-406 provided that: ''The amendments
made by this section (amending this section) shall apply to taxable
years ending on or after June 30, 1972.''
Amendment by section 2004(b), (c)(1) of Pub. L. 93-406 applicable
to years beginning after Dec. 31, 1975, see section 2004(d) of Pub.
L. 93-406, set out as an Effective Date; Transition Provisions note
under section 415 of this title.
Amendment by section 4081(a) of Pub. L. 93-406 effective on Sept.
2, 1974, with exceptions specified in section 1461(b), (c) of Title
29, Labor, see section 1461(a) of Title 29.
EFFECTIVE DATE OF 1969 AMENDMENT
Amendment by Pub. L. 91-172 applicable with respect to
contributions made and premiums paid after Aug. 1, 1969, see
section 321(d) of Pub. L. 91-172, set out as an Effective Date note
under section 83 of this title.
EFFECTIVE DATE OF 1966 AMENDMENT
Amendment by Pub. L. 89-809 applicable with respect to taxable
years beginning after Dec. 31, 1967, see section 204(d) of Pub. L.
89-809, set out as a note under section 401 of this title.
EFFECTIVE DATE OF 1962 AMENDMENTS
Amendment by Pub. L. 87-863 applicable to taxable years beginning
after Oct. 23, 1962, see section 2(c) of Pub. L. 87-863, set out as
a note under section 401 of this title.
Amendment by Pub. L. 87-792 applicable to taxable years beginning
after Dec. 31, 1962, see section 8 of Pub. L. 87-792, set out as a
note under section 22 of this title.
EFFECTIVE DATE OF 1958 AMENDMENT
Amendment by Pub. L. 85-866 applicable to taxable years beginning
after Dec. 31, 1953, and ending after Aug. 16, 1954, see section
1(c)(1) of Pub. L. 85-866, set out as a note under section 165 of
this title.
REGULATIONS
Secretary of the Treasury or his delegate to issue before Feb. 1,
1988, final regulations to carry out amendments made by section
1112 of Pub. L. 99-514, see section 1141 of Pub. L. 99-514, set out
as a note under section 401 of this title.
SAVINGS PROVISION
For provisions that nothing in amendment by Pub. L. 101-508 be
construed to affect treatment of certain transactions occurring,
property acquired, or items of income, loss, deduction, or credit
taken into account prior to Nov. 5, 1990, for purposes of
determining liability for tax for periods ending after Nov. 5,
1990, see section 11821(b) of Pub. L. 101-508, set out as a note
under section 29 of this title.
CLARIFICATION OF TREATMENT OF CONTRIBUTIONS TO MULTIEMPLOYER PLAN
Pub. L. 107-16, title VI, Sec. 658, June 7, 2001, 115 Stat. 137,
provided that:
''(a) Not Considered Method of Accounting. - For purposes of
section 446 of the Internal Revenue Code of 1986, a determination
under section 404(a)(6) of such Code regarding the taxable year
with respect to which a contribution to a multiemployer pension
plan is deemed made shall not be treated as a method of accounting
of the taxpayer. No deduction shall be allowed for any taxable
year for any contribution to a multiemployer pension plan with
respect to which a deduction was previously allowed.
''(b) Regulations. - The Secretary of the Treasury shall
promulgate such regulations as necessary to clarify that a taxpayer
shall not be allowed an aggregate amount of deductions for
contributions to a multiemployer pension plan which exceeds the
amount of such contributions made or deemed made under section
404(a)(6) of the Internal Revenue Code of 1986 to such plan.
''(c) Effective Date. - Subsection (a), and any regulations
promulgated under subsection (b), shall be effective for years
ending after the date of the enactment of this Act (June 7,
2001).''
PLAN AMENDMENTS NOT REQUIRED UNTIL JANUARY 1, 1998
For provisions directing that if any amendments made by subtitle
D (Sec. 1401-1465) of title I of Pub. L. 104-188 require an
amendment to any plan or annuity contract, such amendment shall not
be required to be made before the first day of the first plan year
beginning on or after Jan. 1, 1998, see section 1465 of Pub. L.
104-188, set out as a note under section 401 of this title.
PLAN AMENDMENTS NOT REQUIRED UNTIL JANUARY 1, 1994
For provisions directing that if any amendments made by subtitle
B (Sec. 521-523) of title V of Pub. L. 102-318 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, 1994, see
section 523 of Pub. L. 102-318, 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 (Sec. 1101-1147 and 1171-1177) or title
XVIII (Sec. 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.
COORDINATION OF REPEALS OF CERTAIN SECTIONS
Section 713(d)(8) of Pub. L. 98-369, as amended by Pub. L.
99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that:
''Sections 404(e) and 1379(b) of the Internal Revenue Code of 1986
(formerly I.R.C. 1954) (as in effect on the day before the date of
the enactment of the Tax Equity and Fiscal Responsibility Act of
1982 (Sept. 3, 1982)) shall not apply to any plan to which section
401(j) of such Code applies (or would apply but for its repeal).''
DEDUCTIBILITY OF PAYMENTS TO PLAN BY CORPORATION OPERATING PUBLIC
TRANSPORTATION SYSTEM ACQUIRED BY STATE
Section 408 of Pub. L. 96-364, as amended by Pub. L. 99-514, Sec.
2, Oct. 22, 1986, 100 Stat. 2095, provided that:
''(a) For purposes of subsection (g) of section 404 of the
Internal Revenue Code of 1986 (formerly I.R.C. 1954) (relating to
certain employer liability payments considered as contributions),
as amended by section 205 of this Act, any payment made to a plan
covering employees of a corporation operating a public
transportation system shall be treated as a payment described in
paragraph (1) of such subsection if -
''(1) such payment is made to fund accrued benefits under the
plan in conjunction with an acquisition by a State (or agency or
instrumentality thereof) of the stock or assets of such
corporation, and
''(2) such acquisition is pursuant to a State public
transportation law enacted after June 30, 1979, and before
January 1, 1980.
''(b) The provisions of this section shall apply to payments made
after June 29, 1980.''
YEAR OF DEDUCTION FOR CERTAIN EMPLOYER CONTRIBUTIONS FOR SEVERANCE
PAYMENTS REQUIRED BY FOREIGN LAW
Section 1022(j) of Pub. L. 93-406, as amended by Pub. L. 99-514,
Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ''Effective
for taxable years beginning after December 31, 1973, if -
''(1) an employer is engaged in a trade or business in a
foreign country,
''(2) such employer is required by the laws of that country to
make payments, based on periods of service, to its employees or
their beneficiaries after the employees' retirement, death, or
other separation from the service, and
''(3) such employer establishes a trust (whether organized
within or outside the United States) for the purpose of funding
the payments required by such law,
then, in determining for purposes of paragraph (5) of section
404(a) of the Internal Revenue Code of 1986 (formerly I.R.C. 1954)
the taxable year in which any contribution to or under the plan is
includible in the gross income of the nonresident alien employees
of such employer, such paragraph (5) shall be treated as not
requiring that separate accounts be maintained for such nonresident
alien employees.''
References
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 25B, 62, 72, 83, 104,
162, 172, 381, 401, 402, 403, 404A, 406, 407, 408, 409, 411, 413,
414, 415, 419, 465, 467, 542, 556, 664, 3405, 4941, 4972, 6047,
6048, 6662, 9701, 9704 of this title; title 15 sections 77c, 78c,
78l, 80a-3; title 19 section 2345; title 29 sections 1053, 1055,
1103, 1321, 1322, 1385, 1391, 1396.
