Sec. 457. Deferred Compensation Plans Of State And Local Governments And Tax-Exempt Organizations

I.R.C. § 457(a) Year Of Inclusion In Gross Income

I.R.C. § 457(a)(1) In General —

Any amount of compensation deferred under an eligible deferred compensation plan, and any income attributable to the amounts so deferred, shall be includible in gross income only for the taxable year in which such compensation or other income—

I.R.C. § 457(a)(1)(A) —

is paid to the participant or other beneficiary, in the case of a plan of an eligible employer described in subsection (e)(1)(A), and

I.R.C. § 457(a)(1)(B) —

is paid or otherwise made available to the participant or other beneficiary, in the case of a plan of an eligible employer described in subsection (e)(1)(B).

I.R.C. § 457(a)(2) Special Rule For Rollover Amounts —

To the extent provided in section 72(t)(9), section 72(t) shall apply to any amount includible in gross income under this subsection.

I.R.C. § 457(a)(3) Special Rule For Health And Long-Term Care Insurance —

In the case of a plan of an eligible employer described in subsection (e)(1)(A), to the extent provided in section 402(l), paragraph (1) shall not apply to amounts otherwise includible in gross income under this subsection.

I.R.C. § 457(b) Eligible Deferred Compensation Plan Defined —

For purposes of this section, the term “eligible deferred compensation plan” means a plan established and maintained by an eligible employer—

I.R.C. § 457(b)(1) —

in which only individuals who perform service for the employer may be participants,

I.R.C. § 457(b)(2) —

which provides that (except as provided in paragraph (3)) the maximum amount which may be deferred under the plan for the taxable year (other than rollover amounts) shall not exceed the lesser of—

I.R.C. § 457(b)(2)(A) —

the applicable dollar amount, or

I.R.C. § 457(b)(2)(B) —

100 percent of the participant's includible compensation,

I.R.C. § 457(b)(3) —

which may provide that, for 1 or more of the participant's last 3 taxable years ending before he attains normal retirement age under the plan, the ceiling set forth in paragraph (2) shall be the lesser of—

I.R.C. § 457(b)(3)(A) —

twice the dollar amount in effect under subsection (b)(2)(A), or

I.R.C. § 457(b)(3)(B) —

the sum of—

I.R.C. § 457(b)(3)(B)(i) —

the plan ceiling established for purposes of paragraph (2) for the taxable year (determined without regard to this paragraph), plus

I.R.C. § 457(b)(3)(B)(ii) —

so much of the plan ceiling established for purposes of paragraph (2) for taxable years before the taxable year as has not previously been used under paragraph (2) or this paragraph,

I.R.C. § 457(b)(4) —

which provides that compensation—

I.R.C. § 457(b)(4)(A) —

in the case of an eligible employer described in subsection (e)(1)(A), will be deferred only if an agreement providing for such deferral has been entered into before the compensation is currently available to the individual, and’’.

I.R.C. § 457(b)(4)(B) —

in any other case, will be deferred for any calendar month only if an agreement providing for such deferral has been entered into before the beginning of such month,

I.R.C. § 457(b)(5) —

which meets the distribution requirements of subsection (d), and

I.R.C. § 457(b)(6) —

except as provided in subsection (g), which provides that—

I.R.C. § 457(b)(6)(A) —

all amounts of compensation deferred under the plan,

I.R.C. § 457(b)(6)(B) —

all property and rights purchased with such amounts, and

I.R.C. § 457(b)(6)(C) —

all income attributable to such amounts, property, or rights, shall remain (until made available to the participant or other beneficiary) solely the property and rights of the employer (without being restricted to the provision of benefits under the plan), subject only to the claims of the employer's general creditors.

Editor's Note: Subsec. 457(b) closing text, below, as added by Pub. L. 117-328, Div. T, Sec. 110(f), is applicable to contributions made for plan years beginning after Dec. 31, 2023.

A plan which is established and maintained by an employer which is described in subsection (e)(1)(A) shall not be treated as failing to meet the requirements of this subsection solely because the plan, or another plan maintained by the employer which meets the requirements of section 401(a) or 403(b), provides for matching contributions on account of qualified student loan payments as described in section 401(m)(13).

I.R.C. § 457(c) Limitation —

The maximum amount of the compensation of any one individual which may be deferred under subsection (a) during any taxable year shall not exceed the amount in effect under subsection (b)(2)(A) (as modified by any adjustment provided under subsection (b)(3)).

I.R.C. § 457(d) Distribution Requirements

I.R.C. § 457(d)(1) In General —

For purposes of subsection (b)(5), a plan meets the distribution requirements of this subsection if—

I.R.C. § 457(d)(1)(A) —

under the plan amounts will not be made available to participants or beneficiaries earlier than—

I.R.C. § 457(d)(1)(A)(i) —

the calendar year in which the participant attains age 701/2 (in the case of a plan maintained by an employer described in subsection (e)(1)(A), age 591/2),

I.R.C. § 457(d)(1)(A)(ii) —

when the participant has a severance from employment with the employer,

Editor's Note: Sec. 457(d)(1)(A)(iii) and (iv) before amendment by Pub. L. 117-328, Div. T, Sec. 334(b)(5), is applicable to distributions made on or before the date which is 3 years after the date of the enactment of this Act. [Enacted: Dec. 29, 2022]

I.R.C. § 457(d)(1)(A)(iii) —

when the participant is faced with an unforeseeable emergency (determined in the manner prescribed by the Secretary in regulations), or

I.R.C. § 457(d)(1)(A)(iv) —

except as may be otherwise provided by regulations, in the case of a plan maintained by an employer described in subsection (e)(1)(A), with respect to amounts invested in a lifetime income investment (as defined in section 401(a)(38)(B)(ii)), the date that is 90 days prior to the date that such lifetime income investment may no longer be held as an investment option under the plan,

Editor's Note: Sec. 457(d)(1)(A)(iii)-(v) after amendment by Pub. L. 117-328, Div. T, Sec. 334(b)(5), is applicable to distributions made after the date which is 3 years after the date of the enactment of this Act [Enacted: Dec. 29, 2022].

I.R.C. § 457(d)(1)(A)(iii) —

— when the participant is faced with an unforeseeable emergency (determined in the manner prescribed by the Secretary in regulations),

I.R.C. § 457(d)(1)(A)(iv) —

I.R.C. § 457(d)(1)(A)(v) —

as provided in section 401(a)(39),

I.R.C. § 457(d)(1)(B) —

the plan meets the minimum distribution requirements of paragraph (2),

I.R.C. § 457(d)(1)(C) —

in the case of a plan maintained by an employer described in subsection (e)(1)(A), the plan meets requirements similar to the requirements of section 401(a)(31), and

I.R.C. § 457(d)(1)(D) —

except as may be otherwise provided by regulations, in the case of amounts described in subparagraph (A)(iv), such amounts will be distributed only in the form of a qualified distribution (as defined in section 401(a)(38)(B)(i)) or a qualified plan distribution annuity contract (as defined in section 401(a)(38)(B)(iv)).

Any amount transferred in a direct trustee-to-trustee transfer in accordance with section 401(a)(31) shall not be includible in gross income for the taxable year of transfer.

I.R.C. § 457(d)(2) Minimum Distribution Requirements —

A plan meets the minimum distribution requirements of this paragraph if such plan meets the requirements of section 401(a)(9).

I.R.C. § 457(d)(3) Special Rule For Government Plan —

An eligible deferred compensation plan of an employer described in subsection (e)(1)(A) shall not be treated as failing to meet the requirements of this subsection solely by reason of making a distribution described in subsection (e)(9)(A).

I.R.C. § 457(d)(4) Participant Certification —

In determining whether a distribution to a participant is made when the participant is faced with an unforeseeable emergency, the administrator of a plan maintained by an eligible employer described in subsection (e)(1)(A) may rely on a written certification by the participant that the distribution is—

I.R.C. § 457(d)(4)(A) —

made when the participant is faced with an unforeseeable emergency of a type which is described in regulations prescribed by the Secretary as an unforeseeable emergency, and

I.R.C. § 457(d)(4)(B) —

not in excess of the amount required to satisfy the emergency need, and

that the participant has no alternative means reasonably available to satisfy such emergency need. The Secretary may provide by regulations for exceptions to the rule of the preceding sentence in cases where the plan administrator has actual knowledge to the contrary of the participant's certification, and for procedures for addressing cases of participant misrepresentation.

I.R.C. § 457(e) Other Definitions And Special Rules —

For purposes of this section—

I.R.C. § 457(e)(1) Eligible Employer —

The term “eligible employer” means—

I.R.C. § 457(e)(1)(A) —

a State, political subdivision of a State, and any agency or instrumentality of a State or political subdivision of a State, and

I.R.C. § 457(e)(1)(B) —

any other organization (other than a governmental unit) exempt from tax under this subtitle.

I.R.C. § 457(e)(2) Performance Of Service —

The performance of service includes performance of service as an independent contractor and the person (or governmental unit) for whom such services are performed shall be treated as the employer.

I.R.C. § 457(e)(3) Participant —

The term “participant” means an individual who is eligible to defer compensation under the plan.

I.R.C. § 457(e)(4) Beneficiary —

The term “beneficiary” means a beneficiary of the participant, his estate, or any other person whose interest in the plan is derived from the participant.

I.R.C. § 457(e)(5) Includible Compensation —

The term “includible compensation” has the meaning given to the term “participant's compensation” by section 415(c)(3).

I.R.C. § 457(e)(6) Compensation Taken Into Account At Present Value —

Compensation shall be taken into account at its present value.

I.R.C. § 457(e)(7) Community Property Laws —

The amount of includible compensation shall be determined without regard to any community property laws.

I.R.C. § 457(e)(8) Income Attributable —

Gains from the disposition of property shall be treated as income attributable to such property.

I.R.C. § 457(e)(9) Benefits Of Tax Exempt Organization Plans Not Treated As Made Available By Reason Of Certain Elections, Etc. —

In the case of an eligible deferred compensation plan of an employer described in subsection (e)(1)(B)—

I.R.C. § 457(e)(9)(A) Total Amount Payable Is Dollar Limit Or Less —

The total amount payable to a participant under the plan shall not be treated as made available merely because the participant may elect to receive such amount (or the plan may distribute such amount without the participant's consent) if—

I.R.C. § 457(e)(9)(A)(i) —

the portion of such amount which is not attributable to rollover contributions (as defined in section 411(a)(11)(D)) does not exceed the dollar limit under section 411(a)(11)(A), and

I.R.C. § 457(e)(9)(A)(ii) —

such amount may be distributed only if—

I.R.C. § 457(e)(9)(A)(ii)(I) —

no amount has been deferred under the plan with respect to such participant during the 2-year period ending on the date of the distribution, and

I.R.C. § 457(e)(9)(A)(ii)(II) —

there has been no prior distribution under the plan to such participant to which this subparagraph applied.

A plan shall not be treated as failing to meet the distribution requirements of subsection (d) by reason of a distribution to which this subparagraph applies.

I.R.C. § 457(e)(9)(B) Election To Defer Commencement Of Distributions —

The total amount payable to a participant under the plan shall not be treated as made available merely because the participant may elect to defer commencement of distributions under the plan if—

I.R.C. § 457(e)(9)(B)(i) —

such election is made after amounts may be available under the plan in accordance with subsection (d)(1)(A) and before commencement of such distributions, and

I.R.C. § 457(e)(9)(B)(ii) —

the participant may make only 1 such election.

I.R.C. § 457(e)(10) Transfers Between Plans —

A participant shall not be required to include in gross income any portion of the entire amount payable to such participant solely by reason of the transfer of such portion from 1 eligible deferred compensation plan to another eligible deferred compensation plan.

I.R.C. § 457(e)(11) Certain Plans Excluded

I.R.C. § 457(e)(11)(A) In General —

The following plans shall be treated as not providing for the deferral of compensation:

I.R.C. § 457(e)(11)(A)(i) —

Any bona fide vacation leave, sick leave, compensatory time, severance pay, disability pay, or death benefit plan.

I.R.C. § 457(e)(11)(A)(ii) —

Any plan paying solely length of service awards to bona fide volunteers (or their beneficiaries) on account of qualified services performed by such volunteers.

I.R.C. § 457(e)(11)(B) Special Rules Applicable To Length Of Service Award Plans

I.R.C. § 457(e)(11)(B)(i) Bona Fide Volunteer —

An individual shall be treated as a bona fide volunteer for purposes of subparagraph (A)(ii) if the only compensation received by such individual for performing qualified services is in the form of—

I.R.C. § 457(e)(11)(B)(i)(I) —

reimbursement for (or a reasonable allowance for) reasonable expenses incurred in the performance of such services, or

I.R.C. § 457(e)(11)(B)(i)(II) —

reasonable benefits (including length of service awards), and nominal fees for such services, customarily paid by eligible employers in connection with the performance of such services by volunteers.

I.R.C. § 457(e)(11)(B)(ii) Limitation On Accruals —

A plan shall not be treated as described in subparagraph (A)(ii) if the aggregate amount of length of service awards accruing with respect to any year of service for any bona fide volunteer exceeds $6,000.

I.R.C. § 457(e)(11)(B)(iii) Cost Of Living Adjustment —

In the case of taxable years beginning after December 31, 2017, the Secretary shall adjust the $6,000 amount under clause (ii) at the same time and in the same manner as under section 415(d), except that the base period shall be the calendar quarter beginning July 1, 2016, and any increase under this paragraph that is not a multiple of $500 shall be rounded to the next lowest multiple of $500.

I.R.C. § 457(e)(11)(B)(iv) Special Rule For Application Of Limitation on Accruals For Certain Plans —

In the case of a plan described in subparagraph (A)(ii) which is a defined benefit plan (as defined in section 414(j)), the limitation under clause (ii) shall apply to the actuarial present value of the aggregate amount of length of service awards accruing with respect to any year of service. Such actuarial present value with respect to any year shall be calculated using reasonable actuarial assumptions and methods, assuming payment will be made under the most valuable form of payment under the plan with payment commencing at the later of the earliest age at which unreduced benefits are payable under the plan or the participant's age at the time of the calculation.

I.R.C. § 457(e)(11)(C) Qualified Services —

For purposes of this paragraph, the term “qualified services” means fire fighting and prevention services, emergency medical services, and ambulance services.

I.R.C. § 457(e)(11)(D) Certain Voluntary Early Retirement Incentive Plans

I.R.C. § 457(e)(11)(D)(i) In General —

If an applicable voluntary early retirement incentive plan—

I.R.C. § 457(e)(11)(D)(i)(I) —

makes payments or supplements as an early retirement benefit, a retirement-type subsidy, or a benefit described in the last sentence of section 411(a)(9), and

I.R.C. § 457(e)(11)(D)(i)(II) —

such payments or supplements are made in coordination with a defined benefit plan which is described in section 401(a) and includes a trust exempt from tax under section 501(a) and which is maintained by an eligible employer described in paragraph (1)(A) or by an education association described in clause (ii)(II),

such applicable plan shall be treated for purposes of subparagraph (A)(i) as a bona fide severance pay plan with respect to such payments or supplements to the extent such payments or supplements could otherwise have been provided under such defined benefit plan (determined as if section 411 applied to such defined benefit plan).

I.R.C. § 457(e)(11)(D)(ii) Applicable Voluntary Early Retirement Incentive Plan —

For purposes of this subparagraph, the term “applicable voluntary early retirement incentive plan” means a voluntary early retirement incentive plan maintained by—

I.R.C. § 457(e)(11)(D)(ii)(I) —

a local educational agency (as defined in section 8101 of the Elementary and Secondary Education Act of 1965), or

I.R.C. § 457(e)(11)(D)(ii)(II) —

an education association which principally represents employees of 1 or more agencies described in subclause (I) and which is described in section 501(c)(5) or (6) and exempt from tax under section 501(a).

I.R.C. § 457(e)(12) Exception For Nonelective Deferred Compensation Of Nonemployees

I.R.C. § 457(e)(12)(A) In General —

This section shall not apply to nonelective deferred compensation attributable to services not performed as an employee.

I.R.C. § 457(e)(12)(B) Nonelective Deferred Compensation —

For purposes of subparagraph (A), deferred compensation shall be treated as nonelective only if all individuals (other than those who have not satisfied any applicable initial service requirement) with the same relationship to the payor are covered under the same plan with no individual variations or options under the plan.

I.R.C. § 457(e)(13) Special Rule For Churches —

The term “eligible employer” shall not include a church (as defined in section 3121(w)(3)(A)) or qualified church-controlled organization (as defined in section 3121(w)(3)(B)).

I.R.C. § 457(e)(14) Treatment Of Qualified Governmental Excess Benefit Arrangements —

Subsections (b)(2) and (c)(1) shall not apply to any qualified governmental excess benefit arrangement (as defined in section 415(m)(3)), and benefits provided under such an arrangement shall not be taken into account in determining whether any other plan is an eligible deferred compensation plan.

I.R.C. § 457(e)(15) Applicable Dollar Amount

I.R.C. § 457(e)(15)(A) In General —

The applicable dollar amount is $15,000.

I.R.C. § 457(e)(15)(B) Cost-Of-Living Adjustments —

In the case of taxable years beginning after December 31, 2006, the Secretary shall adjust the $15,000 amount under subparagraph (A) at the same time and in the same manner as under section 415(d), except that the base period shall be the calendar quarter beginning July 1, 2005, and any increase under this paragraph which is not a multiple of $500 shall be rounded to the next lowest multiple of $500.

I.R.C. § 457(e)(16) Rollover Amounts

I.R.C. § 457(e)(16)(A) General Rule —

In the case of an eligible deferred compensation plan established and maintained by an employer described in subsection (e)(1)(A), if—

I.R.C. § 457(e)(16)(A)(i) —

any portion of the balance to the credit of an employee in such plan is paid to such employee in an eligible rollover distribution (within the meaning of section 402(c)(4)),

I.R.C. § 457(e)(16)(A)(ii) —

the employee transfers any portion of the property such employee receives in such distribution to an eligible retirement plan described in section 402(c)(8)(B), and

I.R.C. § 457(e)(16)(A)(iii) —

in the case of a distribution of property other than money, the amount so transferred consists of the property distributed,

then such distribution (to the extent so transferred) shall not be includible in gross income for the taxable year in which paid.

I.R.C. § 457(e)(16)(B) Certain Rules Made Applicable —

The rules of paragraphs (2) through (7), (9), and (11) of section 402(c) and section 402(f) shall apply for purposes of subparagraph (A).

I.R.C. § 457(e)(16)(C) Reporting —

Rollovers under this paragraph shall be reported to the Secretary in the same manner as rollovers from qualified retirement plans (as defined in section 4974(c)).

I.R.C. § 457(e)(17) Trustee-To-Trustee Transfers To Purchase Permissive Service Credit —

No amount shall be includible in gross income by reason of a direct trustee-to-trustee transfer to a defined benefit governmental plan (as defined in section 414(d)) if such transfer is—

I.R.C. § 457(e)(17)(A) —

for the purchase of permissive service credit (as defined in section 415(n)(3)(A)) under such plan, or

I.R.C. § 457(e)(17)(B) —

a repayment to which section 415 does not apply by reason of subsection (k)(3) thereof.

I.R.C. § 457(e)(18) Coordination With Catch-Up Contributions For Individuals Age 50 Or Older —

In the case of an individual who is an eligible participant (as defined by section 414(v)) and who is a participant in an eligible deferred compensation plan of an employer described in paragraph (1)(A), subsections (b)(3) and (c) shall be applied by substituting for the amount otherwise determined under the applicable subsection the greater of—

I.R.C. § 457(e)(18)(A) —

the sum of—

I.R.C. § 457(e)(18)(A)(i) —

the plan ceiling established for purposes of subsection (b)(2) (without regard to subsection (b)(3)), plus

Editor's Note: Sec. 457(e)(18)(A)(ii), below, before amendment by Pub. L. 117-328, Div. T, Sec. 603(b)(2), is applicable to taxable years beginning on or before Dec. 31, 2023.

I.R.C. § 457(e)(18)(A)(ii) —

the applicable dollar amount for the taxable year determined under section 414(v)(2)(B)(i), or

Editor's Note: Sec. 457(e)(18)(A)(ii), below, after amendment by Pub. L. 117-328, Div. T, Sec. 603(b)(2), is applicable to taxable years beginning after Dec. 31, 2023.

I.R.C. § 457(e)(18)(A)(ii) —

the lesser of any designated Roth contributions made by the participant to the plan or the applicable dollar amount for the taxable year determined under section 414(v)(2)(B)(i), or

I.R.C. § 457(e)(18)(B) —

the amount determined under the applicable subsection (without regard to this paragraph).

I.R.C. § 457(f) Tax Treatment Of Participants Where Plan Or Arrangement Of Employer Is Not Eligible

I.R.C. § 457(f)(1) In General —

In the case of a plan of an eligible employer providing for a deferral of compensation, if such plan is not an eligible deferred compensation plan, then—

I.R.C. § 457(f)(1)(A) —

the compensation shall be included in the gross income of the participant or beneficiary for the 1st taxable year in which there is no substantial risk of forfeiture of the rights to such compensation, and

I.R.C. § 457(f)(1)(B) —

the tax treatment of any amount made available under the plan to a participant or beneficiary shall be determined under section 72 (relating to annuities, etc.).

I.R.C. § 457(f)(2) Exceptions —

Paragraph (1) shall not apply to—

I.R.C. § 457(f)(2)(A) —

a plan described in section 401(a) which includes a trust exempt from tax under section 501(a),

I.R.C. § 457(f)(2)(B) —

an annuity plan or contract described in section 403,

I.R.C. § 457(f)(2)(C) —

that portion of any plan which consists of a transfer of property described in section 83,

I.R.C. § 457(f)(2)(D) —

that portion of any plan which consists of a trust to which section 402(b) applies,

I.R.C. § 457(f)(2)(E) —

a qualified governmental excess benefit arrangement described in section 415(m), and

I.R.C. § 457(f)(2)(F) —

that portion of any applicable employment retention plan described in paragraph (4) with respect to any participant.

I.R.C. § 457(f)(3) Definitions —

For purposes of this subsection—

I.R.C. § 457(f)(3)(A) Plan Includes Arrangements, Etc. —

The term “plan” includes any agreement or arrangement.

I.R.C. § 457(f)(3)(B) Substantial Risk Of Forfeiture —

The rights of a person to compensation are subject to a substantial risk of forfeiture if such person's rights to such compensation are conditioned upon the future performance of substantial services by any individual.

I.R.C. § 457(f)(4) Employment Retention Plans —

For purposes of paragraph (2)(F)—

I.R.C. § 457(f)(4)(A) In General —

The portion of an applicable employment retention plan described in this paragraph with respect to any participant is that portion of the plan which provides benefits payable to the participant not in excess of twice the applicable dollar limit determined under subsection (e)(15).

I.R.C. § 457(f)(4)(B) Other Rules

I.R.C. § 457(f)(4)(B)(i) Limitation —

Paragraph (2)(F) shall only apply to the portion of the plan described in subparagraph (A) for years preceding the year in which such portion is paid or otherwise made available to the participant.

I.R.C. § 457(f)(4)(B)(ii) Treatment —

A plan shall not be treated for purposes of this title as providing for the deferral of compensation for any year with respect to the portion of the plan described in subparagraph (A).

I.R.C. § 457(f)(4)(C) Applicable Employment Retention Plan —

The term “applicable employment retention plan” means an employment retention plan maintained by—

I.R.C. § 457(f)(4)(C)(i) —

a local educational agency (as defined in section 8101 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 7801)), or

I.R.C. § 457(f)(4)(C)(ii) —

an education association which principally represents employees of 1 or more agencies described in clause (i) and which is described in section 501(c)(5) or (6) and exempt from taxation under section 501(a).

I.R.C. § 457(f)(4)(D) Employment Retention Plan —

The term “employment retention plan” means a plan to pay, upon termination of employment, compensation to an employee of a local educational agency or education association described in subparagraph (C) for purposes of—

I.R.C. § 457(f)(4)(D)(i) —

retaining the services of the employee, or

I.R.C. § 457(f)(4)(D)(ii) —

rewarding such employee for the employee's service with 1 or more such agencies or associations.

I.R.C. § 457(g) Governmental Plans Must Maintain Set-Asides For Exclusive Benefit Of Participants

I.R.C. § 457(g)(1) In General —

A plan maintained by an eligible employer described in subsection (e)(1)(A) shall not be treated as an eligible deferred compensation plan unless all assets and income of the plan described in subsection (b)(6) are held in trust for the exclusive benefit of participants and their beneficiaries.

I.R.C. § 457(g)(2) Taxability Of Trusts And Participants —

For purposes of this title—

I.R.C. § 457(g)(2)(A) —

a trust described in paragraph (1) shall be treated as an organization exempt from taxation under section 501(a), and

I.R.C. § 457(g)(2)(B) —

notwithstanding any other provision of this title, amounts in the trust shall be includible in the gross income of participants and beneficiaries only to the extent, and at the time, provided in this section.

I.R.C. § 457(g)(3) Custodial Accounts And Contracts —

For purposes of this subsection, custodial accounts and contracts described in section 401(f) shall be treated as trusts under rules similar to the rules under section 401(f).

I.R.C. § 457(g)(4) Death Benefits Under USERRA-Qualified Active Military Service —

A plan described in paragraph (1) shall not be treated as an eligible deferred compensation plan unless such plan meets the requirements of section 401(a)(37).

(Added by Pub. L. 95-600, title I, Sec. 131(a), Nov. 6, 1978, 92 Stat. 2779, and amended by Pub. L. 96-222, title I, Sec. 101(a)(4), Apr. 1, 1980, 94 Stat. 196; Pub. L. 98-369, div. A, title IV, Sec. 491(d)(33), July 18, 1984, 98 Stat. 851; Pub. L. 99-514, title XI, Sec. 1107(a), Oct. 22, 1986, 100 Stat. 2426; Pub. L. 100-647, title I, Sec. 1011(e)(1), (2), (9), (10), title VI, Sec. 6064(a)-(c), 6071(c), Nov. 10, 1988, 102 Stat. 3460, 3461, 3700, 3701, 3705; Pub. L. 101-239, title VII, Sec. 7811(g)(4), (5), 7816(j), Dec. 19, 1989, 103 Stat. 2409, 2421; Pub. L. 102-318, title V, Sec. 521(b)(26), July 3, 1992; Pub. L. 104-188, title I, Sec. 1421(b)(3)(C), 1444(b)(3), 1447(a), (b), 1448(a), (b), 1458(a), Aug. 20, 1996, 110 Stat. 1755; Pub. L. 105-34, title X, Sec. 1071(a)(2), Aug. 5, 1997, 111 Stat 788; Pub. L. 107-16, title VI, Sec. 611, 615, 632, 641, 646, 647, 648, 649, June 7, 2001, 115 Stat. 38; Pub. L. 107-147, title IV, Sec. 411(o)(9), 411(p)(5), Mar. 9, 2002, 116 Stat. 21; Pub. L. 109-280, title VIII, XI, Sec. 829(a)(4), 845(b)(3), 1104, Aug. 17, 2006, 120 Stat. 780; Pub. L. 110-245, Sec. 104(c)(3), June 17, 2008, 122 Stat. 1624; Pub. L. 113-295, Div. A, title II, Sec. 221(a)(57)(H), Dec. 19, 2014, 128 Stat. 4010; Pub. L. 114-95, title IX, Sec. 9215(uu), Dec. 10, 2015, 129 Stat. 1801; Pub. L. 115-97, title I, 13612(a), (b), (c), Dec. 22, 2017, 131 Stat. 2054; Pub. L. 115-141, Div. U, title IV, Sec. 401(a)(112), Mar. 23, 2018, 132 Stat. 348; Pub. L. 116-94, Div. M, Sec. 104(b), Div. O, title I, Sec. 109(d), Dec. 20, 2019; Pub. L. 117-328, Div. T, title I Sec. 110(f), title III, Sec. 306(a), Sec. 310(c), Sec. 312(c), 334(b)(5), title VI, Sec. 604(c)(2), Dec. 29, 2022, __Stat. __.)

BACKGROUND NOTES

AMENDMENTS

2022—Subsec. (b). Pub. L. 117-328, Div. T, Sec. 110(f), amended subsec. (b) by adding flush sentence at the end: “A plan which is established and maintained by an employer which is described in subsection (e)(1)(A) shall not be treated as failing to meet the requirements of this subsection solely because the plan, or another plan maintained by the employer which meets the requirements of section 401(a) or 403(b), provides for matching contributions on account of qualified student loan payments as described in section 401(m)(13).’’.

Subsec. (b)(4). Pub. L. 117-328, Div. T, Sec. 306(a), amended par. (4) by substituting “(4) which provides that compensation—

“(A) in the case of an eligible employer described in subsection (e)(1)(A), will be deferred only if an agreement providing for such deferral has been entered into before the compensation is currently available to the individual, and;

“(B) in any other case, will be deferred for any calendar month only if an agreement providing for such deferral has been entered into before the beginning of such month,” for “which provides that compensation will be deferred for any calendar month only if an agreement providing for such deferral has been entered into before the beginning of such month,” for “(4) which provides that compensation will be deferred for any calendar month only if an agreement providing for such deferral has been entered into before the beginning of such month,”.

Subsec. (d)(1)(A). Pub. L. 117-328, Div. T, Sec. 334(b)(5), amended subpar. (A) by striking ‘‘or’’ at the end of clause (iii), by striking the comma at the end of clause (iv) and inserting ‘‘, or’’, and by adding new clause (v) at the end.

Subsec. (d)(4). Pub. L. 117-328, Div. T, Sec. 312(c), amended subpar. (d) by adding new para. (4).

Subsec. (e)(18)(A)(ii). Pub. L. 117-328, Div. T, Sec. 603(b)(2), amended clause (ii), by inserting ‘‘the lesser of any designated Roth contributions made by the participant to the plan or’’ before ‘‘the applicable dollar amount’’. Prior to amendment, clause (ii) read: “(ii) the applicable dollar amount for the taxable year determined under section 414(v)(2)(B)(i), or”

2019—Subsec. (d)(1)(A)(i). Pub. L. 116-94, Div. M, Sec. 104(b), amended clause (i) by inserting ‘‘(in the case of a plan maintained by an employer described in subsection (e)(1)(A), age 591/2)’’ before the comma at the end.

Subsec. (d)(1)(A)(ii)-(iv). Pub. L. 116-94, Div. O, Sec. 109(d)(1), amended subpar. (A) by striking “or” at the end of clause (ii), by inserting “or” at then end of clause (iii), and by adding clause (iv).

Subsec. (d)(1)(B)-(D). Pub. L. 116-94, Div. O, Sec. 109(d)(2), amended par. (1) by striking “and” at the end of subpar. (B), by substituting “, and” for the period at the end of subpar. (C), and by adding subpar. (D).

2018—Subsec. (f)(4)(C)(i). Pub. L. 115-141, Div. U, Sec. 401(a)(112), amended clause (i) by substituting “section 8101” for “section 9101”; substituting “7801))” for “7801)”.

2017 — Subsec. (e)(11)(B). Pub. L. 115-97, Sec. 13612(a), amended clause (ii) by striking ‘‘$3,000’’ and inserting ‘‘$6,000’’.

Subsec. (e)(11)(B). Pub. L. 115-97, Sec. 13612(b), (c), amended subpar. (B) by adding new clauses (iii) and (iv).

2015 — Subsec. (e)(11)(D)(ii)(I). Pub. L. 114-95, Sec. 9215(uu)(2), amended subclause (I) by substituting “section 8101 of the Elementary and Secondary Education Act of 1965” for “section 9101 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 7801)”.

2014 — Subsec. (e)(15)(A). Pub. L. 113-295, Div. A, Sec. 221(a)(57)(H), amended subpar. (A) by substituting “is $15,000” for “shall be the amount determined in accordance with the following table:

 
 For taxable years beginning The applicable
                dollar amount: in calendar year:
                 2002 $11,000 2003 $12,000 2004
                $13,000 2005 $14,000 2006 or thereafter
                $15,000.”

2008 - Subsec. (g)(4). Pub. L. 110-245, Sec. 104(c)(3), added. par. (4).

2006 - Subsec. (a)(3). Pub. L. 109-280, Sec. 845(b)(3), added par. (3).

Subsec. (e)(11)(D). Pub. L. 109-280, Sec. 1104(a)(1), added subpar. (D).

Subsec.(e)(16)(B). Pub. L. 109-280, Sec. 829(a)(4), amended subpar. (B) by substituting “, (9), and (11)” for “and (9)”.

Subsec. (f)(2)(D)-(F). Pub. L. 109-280, Sec. 1104(b)(1), amended par. (2) by striking “and” at the end of subpar. (E), by substituting “, and” for the period at the end of subpar. (E), and by adding subpar. (F).

Subsec. (f)(4). Pub. L. 109-280, Sec. 1104(b)(2), added par. (4).

2002 - Subsec. (e)(5). Pub. L. 107-147, Sec. 411(p)(5), amended par. (5). Before amendment it read as follows:

“(5) Includible compensation

“The term “includible compensation” means compensation for service performed for the employer which (taking into account the provisions of this section and other provisions of this chapter) is currently includible in gross income.”

Subsec. (e)(18). Pub. L. 107-147, Sec. 411(o)(9), added par. (18).

2001 - Subsec. (a). Pub. L. 107-16, Sec. 649(b)(1), amended subsec. (a). Before amendment it read as follows:

“(a) Year of inclusion in gross income

In the case of a participant in an eligible deferred compensation plan, any amount of compensation deferred under the plan, and any income attributable to the amounts so deferred, shall be includible in gross income only for the taxable year in which such compensation or other income is paid or otherwise made available to the participant or other beneficiary.”

Subsec. (b)(2). Pub. L. 107-16, Sec. 641(a)(1)(B), amended par. (2) by inserting “(other than rollover amounts)” after “taxable year”.

Subsec. (b)(2)(A). Pub. L. 107-16, Sec. 611(e)(1)(A), amended subpar. (A) by substituting “the applicable dollar amount” for “$7,500” each place it appeared.

Subsec. (b)(2)(B). Pub. L. 107-16, Sec. 632(c)(1), amended subpar. (B) by substituting “100 percent” for “33 1/3 percent”.

Subsec. (b)(3)(A). Pub. L. 107-16, Sec. 611(e)(1)(B), amended subpar. (A) by substituting “twice the dollar amount in effect under subsection (b)(2)(A)” for “$15,000”.

Subsec. (c)(1). Pub. L. 107-16, Sec. 611(e)(1)(A), amended par. (1) by substituting “the applicable dollar amount” for “$7,500”.

Subsec. (c)(2). Pub. L. 107-16, Sec. 611(d)(3)(B), amended par. (2) by substituting “402(g)(7)(A)(iii)” for “402(g)(8)(A)(iii)”.

Subsec. (c). Pub. L. 107-16, Sec. 615(a), amended subsec. (c), as amended by Sec. 611 of the Act. Before amendment by Sec. 615(a), it read as follows:

“(c) Individuals who are participants in more than 1 plan

“(1) In general

“The maximum amount of the compensation of any one individual which may be deferred under subsection (a) during any taxable year shall not exceed the applicable dollar amount (as modified by any adjustment provided under subsection (b)(3)).

“(2) Coordination with certain other deferrals

“In applying paragraph (1) of this subsection--

“(A) any amount excluded from gross income under section 403(b) for the taxable year, and

“(B) any amount--

“(ii) with respect to which a deduction is allowable by reason of a contribution to an organization described in section 501(c)(18) for the taxable year, shall be treated as an amount deferred under subsection (a). In applying section 402(g)(7)(A)(iii) or 403(b)(2)(A)(ii), an amount deferred under subsection (a) for any year of service shall be taken into account as if described in section 402(g)(3)(C) or 403(b)(2)(A)(ii), respectively. Subparagraph (B) shall not apply in the case of a participant in a rural cooperative plan (as defined in section 401(k)(7)).”

Subsec. (d)(1)(A). Pub. L. 107-16, Sec. 641(a)(1)(C), amended subpar. (A) by striking “and” at the end, amended subpar. (B) by substituting “, and” for the period at the end, and added subpar. (C).

Subsec. (d)(1)(A)(ii). Pub. L. 107-16, Sec. 646(a)(3), amended clause (ii) by substituting “has a severance from employment” for “is separated from servicce”.

Subsec. (d)(2). Pub. L. 107-16, Sec. 649(a), amended par. (2). Before amendment it read as follows:

“(2) Minimum distribution requirements

“A plan meets the minimum distribution requirements of this paragraph if such plan meets the requirements of subparagraphs (A), (B), and (C):

“(A) Application of section 401(a)(9)

“A plan meets the requirements of this subparagraph if the plan meets the requirements of section 401(a)(9).

“(B) Additional distribution requirements

“A plan meets the requirements of this subparagraph if--

“(i) in the case of a distribution beginning before the death of the participant, such distribution will be made in a form under which--

“(I)the amounts payable with respect to the participant will be paid at times specified by the Secretary which are not later than the time determined under section 401(a)(9)(G) (relating to incidental death benefits), and

“(II) any amount not distributed to the participant during his life will be distributed after the death of the participant at least as rapidly as under the method of distributions being used under subclause (I) as of the date of his death, or

“(ii) in the case of a distribution which does not begin before the death of the participant, the entire amount payable with respect to the participant will be paid during a period not to exceed 15 years (or the life expectancy of the surviving spouse if such spouse is the beneficiary).

“(C) Nonincreasing benefits

“A plan meets the requirements of this subparagraph if any distribution payable over a period of more than 1 year can only be made in substantially nonincreasing amounts (paid not less frequently than annually).”

Subsec. (d)(3). Pub. L. 107-16, Sec. 649(b)(2)(B), added par. (3).

Subsec. (e)(9). Pub. L. 107-16, Sec. 649(b)(2)(A), amended par. (9) by amending the language that preceded subpar. (A). Before amendment it read as follows: “(9) Benefits not treated as made available by reason of certain elections, etc.”.

Subsec. (e)(9)(A)(i). Pub. L. 107-16, Sec. 648(b), amended clause (i) by substituting “the portion of such amount which is not attributable to rollover contriubtions (as defined in section 411(a)(11)(D))” for “such amount”.

Subsec. (e)(15). Pub. L. 107-16, Sec. 611(e)(2), amended par. (15). Before amendment it read as follows:

“(15) Cost-of-living adjustment of maximum deferral amount

The Secretary shall adjust the $7,500 amount specified in subsections (b)(2) and (c)(1) at the same time and in the same manner as under section 415(d), except that the base period shall be the calendar quarter ending September 30, 1994, and any increase under this paragraph which is not a multiple of $500 shall be rounded to the next lowest multiple of $500.”

Subsec. (e)(16). Pub. L. 107-16, Sec. 641(a)(1)(A), added par. (16).

Subsec. (e)(17). Pub. L. 107-16, Sec. 647(b), added par. (17).

1997 - Subsec. (e)(9). Pub. L. 105-34, Sec. 1071(a)(2)(A), amended par. (9) by substituting “the dollar limit under section 411(a)(11)(A)” for “$3,500” except in the heading.

Subsec. (e)(9)(A). Pub. L. 105-34, Sec. 1071(a)(2)(B), amended the heading of subpar. (A) by substituting “dollar limit” for “$3,500”.

1996 - Subsec. (b)(6). Pub. L. 104-188, Sec. 1448(b), inserted “except as provided in subsection (g),” before “which provides that”.

Subsec. (c)(2)(B). Pub. L. 104-188, Sec. 1421(b)(3), substituted “section 402(h)(1)(B) or (k)” for “section 402(h)(1)(B)” in clause (i).

Subsec. (e)(9). Pub. L. 104-188, Sec. 1447(a), amended par. (9). Before amendment, par. (9) read as follows:

“(9) Benefits not treated as made available by reason of certain elections

If--

(A) the total amount payable to a participant under the plan does not exceed $3,500, and

(B) no additional amounts may be deferred under the plan with respect to the participant, the amount payable to the participant under the plan shall not be treated as made available merely because such participant may elect to receive a lump sum payable after separation from service and within 60 days of the election.”

Subsec. (e)(11). Pub. L. 104-188, Sec. 1458(a), amended par. (11). Before amendment, par. (11) read as follows:

“(11) Certain plans excepted--Any bona fide vacation leave, sick leave, compensatory time, severance pay, disability pay, or death benefit plan shall be treated as a plan not providing for the deferral of compensation.”

Subsec. (e)(14). Pub. L. 104-188, Sec. 1444(b)(2), added par. (14).

Subsec. (e)(15). Pub. L. 104-188, Sec. 1447(b), added par. (15).

Subsec. (f)(2). Pub. L. 104-188, Sec. 1444(b)(3), struck “and” from subpar. (C), substituted “, and” for “.” at the end of subpar. (D), and added subpar. (E).

Subsec. (g). Pub. L. 104-188, Sec. 1448(a), added subsec. (g).

1992 - Subsec. (c)(2)(B)(i). Pub. L. 102-318, Sec. 521(b)(26), amended clause (i) by substituting “section 402(e)(3)" for “402(a)(8)”.

1989 - Subsec. (d)(1)(A)(iii). Pub. L. 101-239, Sec. 7811(g)(4), substituted ‘, and’ for period at end.

Subsec. (d)(2)(B)(i)(I). Pub. L. 101-239, Sec. 7811(g)(5), inserted ‘and’ at end.

Subsec. (e)(13). Pub. L. 101-239, Sec. 7816(j), substituted ‘Special rule for churches’ for ‘Exception for church plans’ in heading and amended text generally. Prior to amendment, text read as follows: ‘The term ‘eligible deferred compensation plan’ shall not include a plan maintained by a church for church employees. For purposes of this paragraph, the term ‘church’ has the meaning given such term by section 3121(w)(3)(A), including a qualified church-controlled organization (as defined in section 3121(w)(3)(B)).'

1988 - Subsec. (c)(2). Pub. L. 100-647, Sec. 1011(e)(1), struck out ‘and paragraphs (2) and (3) of subsection (b)’ after ‘of this subsection’.

Pub. L. 100-647, Sec. 6071(c), substituted ‘rural cooperative plan’ for ‘rural electric cooperative plan’ in last sentence.

Subsec. (d)(1)(A). Pub. L. 100-647, Sec. 1011(e)(2), amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: ‘the plan provides that amounts payable under the plan will be made available to participants or other beneficiaries not earlier than when the participant is separated from service with the employer or is faced with an unforeseeable emergency (determined in the manner prescribed by the Secretary by regulation), and’.

Subsec. (d)(2)(B)(i)(I). Pub. L. 100-647, Sec. 1011(e)(10), amended subcl. (I) generally. Prior to amendment, subcl. (I) read as follows: ‘at least 2/3 of the total amount payable with respect to the participant will be paid during the life expectancy of such participant (determined as of the commencement of the distribution), and’.

Subsec. (d)(10). Pub. L. 100-647, Sec. 6064(a)(2), amended subsec. (d), as in effect on the day before the date of enactment of Pub. L. 99-514 (Oct. 22, 1986), by adding par. (10) reading as follows: ‘Certain plans excepted. - Any bona fide vacation leave, sick leave, compensatory time, severance pay, disability pay, or death benefit plan shall be treated as a plan not providing for the deferral of compensation.’

Subsec. (d)(11). Pub. L. 100-647, Sec. 6064(b)(2), amended subsec. (d), as in effect on the day before the date of enactment of Pub. L. 99-514 (Oct. 22, 1986), by adding par. (11) reading as follows: ‘Exception for nonelective deferred compensation of nonemployees. -

‘(A) In general. - This section shall not apply to nonelective deferred compensation attributable to services not performed as an employee.

‘(B) Nonelective deferred compensation. - For purposes of subparagraph (a), deferred compensation shall be treated as nonelective only if all individuals (other than those who have not satisfied any applicable initial service requirement) with the same relationship to the payor are covered under the same plan with no individual variations or options under the plan.’

Subsec. (e)(9). Pub. L. 100-647, Sec. 1011(e)(9), inserted ‘after separation from service and’ after ‘lump sum payable’ in concluding provisions.

Subsec. (e)(11). Pub. L. 100-647, Sec. 6064(a)(1), added par. (11).

Subsec. (e)(12). Pub. L. 100-647, Sec. 6064(b)(1), added par. (12).

Subsec. (e)(13). Pub. L. 100-647, Sec. 6064(c), added par. (13).

1986 - Pub. L. 99-514 amended section generally, substituting ‘Deferred compensation plans of State and local governments and tax-exempt organizations’ for ‘Deferred compensation plans with respect to service for State and local governments’ as section catchline and revising and restating as subsecs. (a) to (c), (e), and (f) provisions formerly contained in subsecs. (a) to (e) and adding provisions comprising subsec. (d).

1984 - Subsec. (e)(2). Pub. L. 98-369, Sec. 491(d)(33), struck out subpar. (C) which provided that par. (1) of this subsection not apply to a qualified bond purchase plan described in section 405(a), and redesignated subpars. (D) and (E) as (C) and (D), respectively.

1980 - Subsec. (d)(9)(B). Pub. L. 96-222 in cl. (i) struck out ‘described in section 501(c)(12)’ after ‘any organization’ and substituted ‘electric service on a mutual or cooperative basis’ for ‘electric service’ and in cl. (ii) substituted ‘paragraph (4) or (6) of section 501(a)’ for ‘section 501(c)(6)’ and ‘at least 80 percent of the members’ for ‘all the members’.

EFFECTIVE DATE OF 2022 AMENDMENTS

Amendment by Pub. L. 117-328, Div. T, Sec. 110(f), applicable to contributions made for plan years beginning after December 31, 2023.

Sec. 110(f), Pub. L. 117-328, provided the following authority:

“(g) REGULATORY AUTHORITY.—The Secretary of the Treasury (or such Secretary's delegate) shall prescribe regulations for purposes of implementing the amendments made by this section, including regulations—

“(1) permitting a plan to make matching contributions for qualified student loan payments, as defined in sections 401(m)(4)(D) and 408(p)(2)(F) of the Internal Revenue Code of 1986, as added by this section, at a different frequency than matching contributions are otherwise made under the plan, provided that the frequency is not less than annually;

“(2) permitting employers to establish reasonable procedures to claim matching contributions for such qualified student loan payments under the plan, including an annual deadline (not earlier than 3 months after the close of each plan year) by which a claim must be made; and

“(3) promulgating model amendments which plans may adopt to implement matching contributions on such qualified student loan payments for purposes of sections 401(m), 408(p), 403(b), and 457(b) of the Internal Revenue Code of 1986.”

Amendments by Pub. L. 117-328, Div. T, Sec. 306(a), effective for taxable years beginning after the date of the enactment of this Act [Enacted: Dec. 29, 2022].

Amendment by Pub. L. 117-328, Div. T, Sec. 312(c), effective for plan years beginning after the date of the enactment of this Act [Enacted: Dec. 29, 2022].

Amendments by Pub. L. 117-328, Div. T, Sec. 334(b)(5), effective for distributions which is the date 3 years after the date of the enactment of this Act [Enacted: Dec. 29, 2022].

Amendments by Pub. L. 117-328, Div. T, Sec. 603(c)(2), is effective for plan years beginning after December 31, 2023.

EFFECTIVE DATE OF 2019 AMENDMENTS

Amendment by Pub. L. 116-94, Div. M, Sec. 104(b), effective for plan years beginning after December 31, 2019.

Amendments by Pub. L. 116-94, Div. O, Sec. 109(d), is effective for plan years beginning after December 31, 2019.

EFFECTIVE DATE OF 2018 AMENDMENT

Amendments by Pub. L. 115-141, Div. U, Sec. 401(a)(112), effective March 23, 2018.

EFFECTIVE DATE OF 2017 AMENDMENT

Amendments by Pub. L. 115-97, Sec. 13612, effective for taxable years beginning after December 31, 2017.

EFFECTIVE DATE OF 2015 AMENDMENT

Amendment by Pub. L. 114-95, Sec. 9215(uu), effective on the date of the enactment of this Act [Enacted: Dec. 10, 2015].

EFFECTIVE DATE OF 2014 AMENDMENT

Amendment by Pub. L. 113-295, Div. A, Sec. 221(a)(57)(H), effective on the date of the enactment of this Act [Enacted: Dec. 19, 2014].

EFFECTIVE DATE OF 2008 AMENDMENT

Amendment by Sec. 104(c)(3) of Pub. L. 110-245 effective with respect to deaths and disabilities occurring on or after January 1, 2007. Sec. 104(d)(2) of Pub. L. 110-245 provided that:

“(2) PROVISIONS RELATING TO PLAN AMENDMENTS-

“ (A) IN GENERAL- If this subparagraph applies to any plan or contract amendment, such plan or contract shall be treated as being operated in accordance with the terms of the plan during the period described in subparagraph (B)(iii).

“(B) AMENDMENTS TO WHICH SUBPARAGRAPH (A) APPLIES-

“(i) IN GENERAL- Subparagraph (A) shall apply to any amendment to any plan or annuity contract which is made—

“(I) pursuant to the amendments made by subsection (a) or pursuant to any regulation issued by the Secretary of the Treasury under subsection (a), and

“(II) on or before the last day of the first plan year beginning on or after January 1, 2010. In the case of a governmental plan (as defined in section 414(d) of the Internal Revenue Code of 1986), this clause shall be applied by substituting ‘2012’ for ‘2010’ in subclause (II).

“(ii) CONDITIONS- This paragraph shall not apply to any amendment unless—

“(I) the plan or contract is operated as if such plan or contract amendment were in effect for the period described in clause (iii), and

“(II) such plan or contract amendment applies retroactively for such period.

“(iii) PERIOD DESCRIBED- The period described in this clause is the period—

“(I) beginning on the effective date specified by the plan, and

“(II) ending on the date described in clause (i)(II) (or, if earlier, the date the plan or contract amendment is adopted).”

EFFECTIVE DATE OF 2006 AMENDMENTS

Amendment by Sec. 829 of Pub. L. 109-280 effective for distributions after December 31, 2006.

Amendment by Sec. 845 of Pub. L. 109-280 effective for distributions in taxable years beginning after December 31, 2006.

Amendments by Sec. 1104 of Pub. L. 109-280 effective for taxable years ending after the date of the enactment of this Act [Enacted: Aug. 17, 2006].

EFFECTIVE DATE OF 2002 AMENDMENTS

Amendment by Sec. 411(o)(9) of Pub. L. 107-147 appicable as if included in the provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 [Pub. L. 107-16, Sec. 631] to which it relates.

Amendment by Sec. 411(p)(5) of Pub. L. 107-147 applicable as if included in the provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 [Pub. L. 107-16, Sec. 632] to which it relates.

EFFECTIVE DATE OF 2001 AMENDMENTS

Amendments by Sec. 611 of Pub. L. 107-16 applicable to years beginning after December 31, 2001. Sec. 611(i) of Pub. L. 107-16, as added by Pub. L. 107-147, Sec. 411(j)(3), provided the following special rule:

“(3) Special rule.--In the case of plan that, on June 7, 2001, incorporated by reference the limitation of section 415(b)(1)(A) of the Internal Revenue Code of 1986, section 411(d)(6) of such Code and section 204(g)(1) of the Employee Retirement Income Security Act of 1974 do not apply to a plan amendment that--

“(A) is adopted on or before June 30, 2002,

“(B) reduces benefits to the level that would have applied without regard to the amendments made by subsection (a) of this section, and

“(C) is effective no earlier than the years described in paragraph (2).”

Amendments by Sec. 615(a) of Pub. L. 107-16 applicable to years beginning after December 31, 2001.

Amendments by Sec. 632(c) of Pub. L. 107-16 applicable to years beginning after December 31, 2001.

Amendments by Sec. 641 of Pub. L. 107-16 applicable to distributions after December 31, 2001. Sec. 641(f) of Pub. L. 107-16 provided the following special rules:

“(2) REASONABLE NOTICE.--No penalty shall be imposed on a plan for the failure to provide the information required by the amendment made by subsection (c) with respect to any distribution made before the date that is 90 days after the date on which the Secretary of the Treasury issues a safe harbor rollover notice after the date of the enactment of this Act, if the administrator of such plan makes a reasonable attempt to comply with such requirement.

“(3) SPECIAL RULE.--Notwithstanding any other provision of law, subsections (h)(3) and (h)(5) of section 1122 of the Tax Reform Act of 1986 shall not apply to any distribution from an eligible retirement plan (as defined in clause (iii) or (iv) of section 402(c)(8)(B) of the Internal Revenue Code of 1986) on behalf of an individual if there was a rollover to such plan on behalf of such individual which is permitted solely by reason of any amendment made by this section.”

Amendments by Sec. 646 of Pub. L. 107-16 applicable to distributions after December 31, 2001.

Amendments by Sec. 647 of Pub. L. 107-16 applicable to trustee-to-trustee transfers after December 31, 2001.

Amendments by Sec. 648 of Pub. L. 107-16 applicable to distributions after December 31, 2001.

Amendments by Sec. 649 of Pub. L. 107-16 applicable to distributions after December 31, 2001.

Section 901 (Sunset of Provisions of Act) of Pub. L. 107-16, as amended by Pub. L. 107-358, provided that:

“(a) IN GENERAL.--All provisions of, and amendments made by, this Act shall not apply--

“(1) to taxable, plan, or limitation years beginning after December 31, 2010, or

“(2) in the case of title V, to estates of decedents dying, gifts made, or generation skipping transfers, after December 31, 2010.

“(b) APPLICATION OF CERTAIN LAWS.--The Internal Revenue Code of 1986 and the Employee Retirement Income Security Act of 1974 shall be applied and administered to years, estates, gifts, and transfers described in subsection (a) as if the provisions and amendments described in subsection (a) had never been enacted.

“(c) EXCEPTION.-Subsection (a) shall not apply to section 803 (relating to no federal income tax on restitution received by victims of the Nazi regime or their heirs or estates).”

REGULATORY AUTHORITY

Section 110(g) of Pub. L. 117-328, Div. T, provided the following authority:

“(g) REGULATORY AUTHORITY.—

“The Secretary of the Treasury (or such Secretary's delegate) shall prescribe regulations for purposes of implementing the amendments made by this section, including regulations—

“ (1) permitting a plan to make matching contributions for qualified student loan payments, as defined in sections 401(m)(4)(D) and 408(p)(2)(F) of the Internal Revenue Code of 1986, as added by this section, at a different frequency than matching contributions are otherwise made under the plan, provided that the frequency is not less than annually;

“ (3) promulgating model amendments which plans may adopt to implement matching contributions on such qualified student loan payments for purposes of sections 401(m), 408(p), 403(b), and 457(b) of the Internal Revenue Code of 1986.”

ELIMINATING A PENALTY ON PARTIAL ANNUITIZATION.

Section 204 of Pub. L. 117-328 provided that:

“(a) ELIMINATING A PENALTY ON PARTIAL ANNUITIZATION.—The Secretary of the Treasury (or the Secretary's delegate) shall amend the regulations under section 401(a)(9) of the Internal Revenue Code of 1986 to provide that if an employee's benefit is in the form of an individual account under a defined contribution plan, the plan may allow the employee to elect to have the amount required to be distributed from such account under such section for a year to be calculated as the excess of the total required amount for such year over the annuity amount for such year.

“(b) DEFINITIONS.—For purposes of this section—

“(1) TOTAL REQUIRED AMOUNT.—The term ‘‘total required amount’’, with respect to a year, means the amount which would be required to be distributed under Treas. Reg. section 1.401(a)(9)–5 (or any successor regulation) for the year, determined by treating the account balance as of the last valuation date in the immediately preceding calendar year as including the value on that date of all annuity contracts which were purchased with a portion of the account and from which payments are made in accordance with Treas. Reg. section 1.401(a)(9)–6.

“(2) ANNUITY AMOUNT.—The term ‘‘annuity amount’’, with respect to a year, is the total amount distributed in the year from all annuity contracts described in paragraph (1).

“(c) CONFORMING REGULATORY AMENDMENTS.—The Secretary of the Treasury (or the Secretary's delegate) shall amend the regulations under sections 403(b)(10), 408(a)(6), 408(b)(3), and 457(d)(2) of the Internal Revenue Code of 1986 to conform to the amendments described in subsection (a). Such conforming amendments shall treat all individual retirement plans (as defined in section 7701(a)(37) of such Code) which an individual holds as the owner, or which an individual holds as a beneficiary of the same decedent, as one such plan for purposes of the amendments described in subsection (a). Such conforming amendments shall also treat all contracts described in section 403(b) of such Code which an individual holds as an employee, or which an individual holds as a beneficiary of the same decedent, as one such contract for such purposes.

“(d) EFFECTIVE DATE.—The modifications and amendments required under subsections (a) and (c) shall be deemed to have been made as of the date of the enactment of this Act, and as of such date—

“(1) all applicable laws shall be applied in all respects as though the actions which the Secretary of the Treasury (or the Secretary's delegate) is required to take under such subsections had been taken, and

“(2) until such time as such actions are taken, taxpayers may rely upon their reasonable good faith interpretations of this section.”

PENSIONS AND INDIVIDUAL RETIREMENT ARRANGEMENT PROVISIONS OF ECONOMIC GROWTH AND TAX RELIEF RECONCILIATION ACT OF 2001 MADE PERMANENT

Section 811 of Pub. L. 109-280 provided that:

“Title IX of the Economic Growth and Tax Relief Reconciliation Act of 2001 shall not apply to the provisions of, and amendments made by, subtitles A through F of title VI of such Act (relating to pension and individual retirement arrangement provisions).”

EFFECTIVE DATE OF 1997 AMENDMENTS

Amendments by Sec. 1071(a) of Pub. L. 105-34 applicable to plan years beginning after the date of the enactment of this Act [Aug. 5, 1997].

EFFECTIVE DATE OF 1996 AMENDMENT

Amendment by Pub. L. 104-188, Sec. 1421(b)(3), effective for taxable years beginning after December 31, 1996

Amendments by Pub. L. 104-188, Sec. 1444(b), effective for years beginning after December 31, 1994. Sec. 1444(e)(2) provided that: “Nothing in the amendments made by this section shall be construed to imply that a governmental plan (as defined in section 414(d) of the Internal Revenue Code of 1986) fails to satisfy the requirements of section 415 of such Code for any taxable year beginning before January 1, 1995.”

Amendments by Pub. L. 104-188, Sec. 1447, effective for taxable years beginning after December 31, 1996.

Amendments by Pub. L. 104-188, Sec. 1448, effective for assets and income described in section 457(b)(6) of the Internal Revenue Code of 1986 held by a plan on or after the date of the enactment of this Act [Aug. 20, 1996]. Sec. 1448(c)(2) provided the following transition rule:

(2) Transition rule.--In the case of a plan in existence on the date of the enactment of this Act [Aug. 20, 1996], a trust need not be established by reason of the amendments made by this section before January 1, 1999.

Amendment by Pub. L. 104-188, Sec. 1458(b), effective for remuneration paid after December 31, 1996.

EFFECTIVE DATE OF 1992 AMENDMENT

Amendment by Pub. L. 102-318, Sec. 521(b)(26), effective for distributions after December 31, 1992.

EFFECTIVE DATE OF 1989 AMENDMENT

Amendment by Pub. L. 101-239 effective, except as otherwise provided, as if included in the provision of the Technical and Miscellaneous Revenue Act of 1988, Pub. L. 100-647, to which such amendment relates, see section 7817 of Pub. L. 101-239, set out as a note under section 1 of this title.

EFFECTIVE DATE OF 1988 AMENDMENT

Section 1011(e)(9) of Pub. L. 100-647 provided that the amendment made by that section is effective for years beginning after Dec. 31, 1988.

Amendment by section 1011(e)(1), (2), (10) 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 6064(d) of Pub. L. 100-647 provided that:

‘(1) In general. - The amendments made by this section (amending this section) shall apply to taxable years beginning after December 31, 1987.

‘(2) Exception for certain collectively bargained plans. -

‘(A) In general. - Section 457 of the 1986 Code (as in effect before and after the amendments made by section 1107 of the Reform Act (Pub. L. 99-514)) shall not apply to nonelective deferred compensation provided under a plan in existence on December 31, 1987, and maintained pursuant to a collective bargaining agreement.

‘(B) Nonelective plan. - For purposes of this paragraph, a nonelective plan is a plan which covers a broad group of employees and under which the covered employees earn nonelective deferred compensation under a definite, fixed and uniform benefit formula.

‘(C) Termination. - This paragraph shall cease to apply to a plan as of the effective date of the first material modification of the plan agreed to after December 31, 1987.

‘(3) Treatment of certain nonelective deferred compensation. - Section 457 of the 1986 Code shall not apply to amounts deferred under a nonelective deferred compensation plan maintained by an eligible employer described in section 457(e)(1)(A) of the 1986 Code (as in effect after the Reform Act (Pub. L. 99-514)) -

‘(A) if such amounts were deferred from periods before July 14, 1988, or

‘(B) if -

‘(i) such amounts are deferred from periods on or after such date pursuant to an agreement which -

‘(I) was in writing on such date, and

‘(II) on such date provides for a deferral for each taxable year covered by the agreement of a fixed amount or of an amount determined pursuant to a fixed formula, and

‘(ii) the individual with respect to whom the deferral is made was covered under such agreement on such date.

Subparagraph (B) shall not apply to any taxable year ending after the date on which any modification of the amount or formula described in subparagraph (B)(i)(II) agreed to in writing before January 1, 1989, is effective. The preceding sentence shall not apply to a modification agreed to in writing before January 1, 1989, which does not increase any benefit of a participant.

Amounts described in the first sentence of this paragraph shall be taken into account for purposes of applying section 457 of the 1986 Code to other amounts deferred under any eligible deferred compensation plan.

‘(4) Study. - The Secretary of the Treasury or his delegate shall conduct a study on the tax treatment of deferred compensation paid by State and local governments and tax-exempt organizations (including deferred compensation paid to independent contractors). Not later than January 1, 1990, the Secretary shall submit to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate a report on the study conducted under this paragraph together with such recommendations as he may deem advisable.’

(The due date for the report on the study referred to in section 6064(d)(4) of Pub. L. 100-647, set out above, extended to Jan. 1, 1992, by Pub. L. 101-508, title XI, Sec. 11831(b), Nov. 5, 1990, 104 Stat. 1388-559.)

Amendment by section 6071(c) of Pub. L. 100-647 applicable to taxable years beginning after Nov. 10, 1988, see section 6071(d) of Pub. L. 100-647, set out as a note under section 401 of this title.

EFFECTIVE DATE OF 1986 AMENDMENT

Section 1107(c) of Pub. L. 99-514, as amended by Pub. L. 100-647, title I, Sec. 1011(e)(6), (7), Nov. 10, 1988, 102 Stat. 3461, provided that:

‘(1) In general. - Except as provided in this subsection, the amendments made by this section (amending this section) shall apply to taxable years beginning after December 31, 1988.

‘(2) Transfers and cash-outs. - Paragraphs (9) and (10) of section 457(e) of the Internal Revenue Code of 1986 (as amended by this section) shall apply to taxable years beginning after December 31, 1986.

‘(3) Application to tax-exempt organizations. -

‘(A) In general. - Except as provided in subparagraph (B), the application of section 457 of the Internal Revenue Code of 1986 by reason of the amendments made by this section to deferred compensation plans established and maintained by organizations exempt from tax shall apply to taxable years beginning after December 31, 1986.

‘(B) Existing deferrals and arrangements. - Section 457 of such Code shall not apply to amounts deferred under a plan described in subparagraph (A) which -

‘(i) were deferred from taxable years beginning before January 1, 1987, or

‘(ii) are deferred from taxable years beginning after December 31, 1986, pursuant to an agreement which -

‘(I) was in writing on August 16, 1986,

‘(II) on such date provides for a deferral for each taxable year covered by the agreement of a fixed amount or of an amount determined pursuant to a fixed formula.

Clause (ii) shall not apply to any taxable year ending after the date on which any modification to the amount or formula described in subclause (II) is effective. Amounts described in the first sentence shall be taken into account for applying section 457 to other amounts deferred under any deferred compensation plan.

This subparagraph shall only apply to individuals who were covered under the plan and agreement on August 16, 1986.

‘(4) Deferred compensation plans for state judges. - The amendments made by this section shall not apply to any qualified State judicial plan (as defined in section 131(c)(3)(B) of the Revenue Act of 1978 (set out as a note below) as amended by section 252 of the Tax Equity and Fiscal Responsibility Act of 1982).

‘(5) Special rule for certain deferred compensation plans. - The amendments made by this section shall not apply -

‘(A) to employees on August 16, 1986, of a nonprofit corporation organized under the laws of the State of Alabama maintaining a deferred compensation plan with respect to which the Internal Revenue Service issued a ruling dated March 17, 1976, that the plan would not affect the tax-exempt status of the corporation, or

‘(B) to to (sic) individuals eligible to participate on August 16, 1986, in a deferred compensation plan with respect to which a letter dated November 6, 1975, submitted the original plan to the Internal Revenue Service, an amendment was submitted on November 19, 1975, and the Internal Revenue Service responded with a letter dated December 24, 1975, but only with respect to deferrals under such plan.’

EFFECTIVE DATE OF 1984 AMENDMENT

Amendment by Pub. L. 98-369 applicable to obligations issued after Dec. 31, 1983, see section 491(f)(1) of Pub. L. 98-369, set out as a note under section 62 of this title.

EFFECTIVE DATE OF 1980 AMENDMENT

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

Section 131(c)(1) of Pub. L. 95-600 provided that: ‘The amendments made by this section (enacting this section) shall apply to taxable years beginning after December 31, 1978.’

CONFORMING REGULATORY AMENDMENTS

Section 204(c)-(d) of Pub. L. 117-328 provided that:

“The Secretary of the Treasury (or the Secretary's delegate) shall amend the regulations under sections 403(b)(10), 408(a)(6), 408(b)(3), and 457(d)(2) of the Internal Revenue Code of 1986 to conform to the amendments described in subsection (a). Such conforming amendments shall treat all individual retirement plans (as defined in section 7701(a)(37) of such Code) which an individual holds as the owner, or which an individual holds as a beneficiary of the same decedent, as one such plan for purposes of the amendments described in subsection (a). Such conforming amendments shall also treat all contracts described in section 403(b) of such Code which an individual holds as an employee, or which an individual holds as a beneficiary of the same decedent, as one such contract for such purposes.”

“(d) EFFECTIVE DATE.—The modifications and amendments required under subsections (a) and (c) shall be deemed to have been made as of the date of the enactment of this Act, and as of such date—

“(2) until such time as such actions are taken, taxpayers may rely upon their reasonable good faith interpretations of this section.”

RELIEF FOR 2016 DISASTER AREAS

Section 11028 of Pub. L. 115-97 provided that:

“(a) IN GENERAL.—For purposes of this section, the term ‘2016 disaster area’ means any area with respect to which a major disaster has been declared by the President under section 401 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act during calendar year 2016.

“(b) SPECIAL RULES FOR USE OF RETIREMENT FUNDS WITH RESPECT TO AREAS DAMAGED BY 2016 DISASTERS.—

“(1) TAX-FAVORED WITHDRAWALS FROM RETIREMENT PLANS.—

“(A) IN GENERAL.—Section 72(t) of the Internal Revenue Code of 1986 shall not apply to any qualified 2016 disaster distribution.

“(B) AGGREGATE DOLLAR LIMITATION.—

“(i) IN GENERAL.—For purposes of this subsection, the aggregate amount of distributions received by an individual which may be treated as qualified 2016 disaster distributions for any taxable year shall not exceed the excess (if any) of—

“(I) $100,000, over (II) the aggregate amounts treated as qualified 2016 disaster distributions received by such individual for all prior taxable years.

“(ii) TREATMENT OF PLAN DISTRIBUTIONS.—If a distribution to an individual would (without regard to clause (i)) be a qualified 2016 disaster distribution, a plan shall not be treated as violating any requirement of this title merely because the plan treats such distribution as a qualified 2016 disaster distribution, unless the aggregate amount of such distributions from all plans maintained by the employer (and any member of any controlled group which includes the employer) to such individual exceeds $100,000.

“(iii) CONTROLLED GROUP.—For purposes of clause (ii), the term ‘controlled group’ means any group treated as a single employer under subsection (b), (c), (m), or (o) of section 414 of the Internal Revenue Codeof 1986.

“(C) AMOUNT DISTRIBUTED MAY BE REPAID.—

“(i) IN GENERAL.—Any individual who receives a qualified 2016 disaster distribution may, at any time during the 3-year period beginning on the day after the date on which such distribution was received, make one or more contributions in an aggregate amount not to exceed the amount of such distribution to an eligible retirement plan of which such individual is a beneficiary and to which a rollover contribution of such distribution could be made under section 402(c), 403(a)(4), 403(b)(8), 408(d)(3), or 457(e)(16) of the Internal Revenue Code of 1986, as the case may be.

“(ii) TREATMENT OF REPAYMENTS OF DISTRIBUTIONS FROM ELIGIBLE RETIREMENT PLANS OTHER THAN IRAS.— For purposes of the Internal Revenue Code of 1986, if a contribution is made pursuant to clause (i) with respect to a qualified 2016 disaster distribution from an eligible retirement plan other than an individual retirement plan, then the taxpayer shall, to the extent of the amount of the contribution, be treated as having received the qualified 2016 disaster distribution in an eligible rollover distribution (as defined in section 402(c)(4) of the Internal Revenue Code of 1986) and as having transferred the amount to the eligible retirement plan in a direct trustee to trustee transfer within 60 days of the distribution.

“(iii) TREATMENT OF REPAYMENTS FOR DISTRIBUTIONS FROM IRAS.—For purposes of the Internal Revenue Code of 1986, if a contribution is made pursuant to clause (i) with respect to a qualified 2016 disaster distribution from an individual retirement plan (as defined by section 7701(a)(37) of the Internal Revenue Code of 1986), then, to the extent of the amount of the contribution, the qualified 2016 disaster distribution shall be treated as a distribution described in section 408(d)(3) of such Code and as having been transferred to the eligible retirement plan in a direct trustee to trustee transfer within 60 days of the distribution.

“(D) DEFINITIONS.—For purposes of this paragraph—

“(i) QUALIFIED 2016 DISASTER DISTRIBUTION.—Except as provided in subparagraph (B), the term ‘‘qualified 2016 disaster distribution’’ means any distribution from an eligible retirement plan made on or after January 1, 2016, and before January 1, 2018, to an individual whose principal place of abode at any time during calendar year 2016 was located in a disaster area described in subsection (a) and who has sustained an economic loss by reason of the events giving rise to the Presidential declaration described in subsection (a) which was applicable to such area.

“(ii) ELIGIBLE RETIREMENT PLAN.—The term ‘eligible retirement plan’ shall have the meaning given such term by section 402(c)(8)(B) of the Internal Revenue Code of 1986.

“(E) INCOME INCLUSION SPREAD OVER 3-YEAR PERIOD.—

“(i) IN GENERAL.—In the case of any qualified 2016 disaster distribution, unless the taxpayer elects not to have this subparagraph apply for any taxable year, any amount required to be included in gross income for such taxable year shall be so included ratably over the 3-taxable-year period beginning with such taxable year.

“(ii) SPECIAL RULE.—For purposes of clause (i), rules similar to the rules of subparagraph (E) of section 408A(d)(3) of the Internal Revenue Code of 1986 shall apply.

“(F) SPECIAL RULES.—

“(i) EXEMPTION OF DISTRIBUTIONS FROM TRUSTEE TO TRUSTEE TRANSFER AND WITHHOLDING RULES.—For purposes of sections 401(a)(31), 402(f), and 3405 of the Internal Revenue Code of 1986, qualified 2016 disaster distribution shall not be treated as eligible rollover distributions.

“(ii) QUALIFIED 2016 DISASTER DISTRIBUTIONS TREATED AS MEETING PLAN DISTRIBUTION REQUIREMENTS.—For purposes of the Internal Revenue Code of 1986, a qualified 2016 disaster distribution shall be treated as meeting the requirements of sections 401(k)(2)(B)(i), 403(b)(7)(A)(ii), 403(b)(11), and 457(d)(1)(A) of the Internal Revenue Code of 1986. (2) PROVISIONS RELATING TO PLAN AMENDMENTS.—

“(A) IN GENERAL.—If this paragraph applies to any amendment to any plan or annuity contract, such plan or contract shall be treated as being operated in accordance with the terms of the plan during the period described in subparagraph (B)(ii)(I).

“(B) AMENDMENTS TO WHICH SUBSECTION APPLIES.—

“(i) IN GENERAL.—This paragraph shall apply to any amendment to any plan or annuity contract which is made—

“(I) pursuant to any provision of this section, or pursuant to any regulation under any provision of this section, and

“(II) on or before the last day of the first plan year beginning on or after January 1, 2018, or such later date as the Secretary prescribes. In the case of a governmental plan (as defined in section 414(d) of the Internal Revenue Code of 1986), subclause (II) shall be applied by substituting the date which is 2 years after the date otherwise applied under subclause (II).

“(ii) CONDITIONS.—This paragraph shall not apply to any amendment to a plan or contract unless such amendment applies retroactively for such period, and shall not apply to any such amendment unless the plan or contract is operated as if such amendment were in effect during the period—

“(I) beginning on the date that this section or the regulation described in clause (i)(I) takes effect (or in the case of a plan or contract amendment not required by this section or such regulation, the effective date specified by the plan), and

“(II) ending on the date described in clause (i)(II) (or, if earlier, the date the plan or contract amendment is adopted).

“(c) SPECIAL RULES FOR PERSONAL CASUALTY LOSSES RELATED TO 2016 MAJOR DISASTER.—

“(1) IN GENERAL.—If an individual has a net disaster loss for any taxable year beginning after December 31, 2015, and before January 1, 2018—

“(A) the amount determined under section 165(h)(2)(A)(ii) of the Internal Revenue Code of 1986 shall be equal to the sum of—

“(i) such net disaster loss, and

“(ii) so much of the excess referred to in the matter preceding clause (i) of section 165(h)(2)(A) of such Code (reduced by the amount in clause (i) of this subparagraph) as exceeds 10 percent of the adjusted gross income of the individual,

“(B) section 165(h)(1) of such Code shall be applied by substituting ‘$500’ for ‘$500 ($100 for taxable years beginning after December 31, 2009)’,

“(C) the standard deduction determined under section 63(c) of such Code shall be increased by the net disaster loss,

“(D) section 56(b)(1)(E) of such Code shall not apply to so much of the standard deduction as is attributable to the increase under subparagraph (C) of this paragraph.

“(2) NET DISASTER LOSS.—For purposes of this subsection, the term ‘net disaster loss’ means the excess of qualified disaster-related personal casualty losses over personal casualty gains (as defined in section 165(h)(3)(A) of the Internal Revenue Code of 1986).

“(3) QUALIFIED DISASTER-RELATED PERSONAL CASUALTY LOSSES.—For purposes of this paragraph, the term ‘qualified disaster-related personal casualty losses’ means losses described in section 165(c)(3) of the Internal Revenue Code of 1986 which arise in a disaster area described in subsection (a) on or after January 1, 2016, and which are attributable to the events giving rise to the Presidential declaration described in subsection (a) which was applicable to such area.”

QUALIFIED HURRICANE DISTRIBUTIONS TREATED AS MEETING PLAN DISTRIBUTION REQUIREMENTS

Section 502(a) of Pub. L. 115-63 provided:

“ (1) IN GENERAL .--Section 72(t) of the Internal Revenue Code of 1986 shall not apply to any qualified hurricane distribution.

“ (2) AGGREGATE DOLLAR LIMITATION.--

“(A) IN GENERAL. --For purposes of this subsection, the aggregate amount of distributions received by an individual which may be treated as qualified hurricane distributions for any taxable year shall not exceed the excess (if any) of--

“(i) $100,000, over

“(ii) the aggregate amounts treated as qualified hurricane distributions received by such individual for all prior taxable years.

“(B) TREATMENT OF PLAN DISTRIBUTIONS.--If a distribution to an individual would (without regard to subparagraph (A)) be a qualified hurricane distribution, a plan shall not be treated as violating any requirement of the Internal Revenue Code of 1986 merely because the plan treats such distribution as a qualified hurricane distribution, unless the aggregate amount of such distributions from all plans maintained by the employer (and any member of any controlled group which includes the employer) to such individual exceeds $100,000.

“(C) CONTROLLED GROUP.--For purposes of subparagraph (B), the term “controlled group” means any group treated as a single employer under subsection (b), (c), (m), or (o) of section 414 of the Internal Revenue Code of 1986.

“(3) AMOUNT DISTRIBUTED MAY BE REPAID.--

“(A) IN GENERAL.--Any individual who receives a qualified hurricane distribution may, at any time during the 3-year period beginning on the day after the date on which such distribution was received, make one or more contributions in an aggregate amount not to exceed the amount of such distribution to an eligible retirement plan of which such individual is a beneficiary and to which a rollover contribution of such distribution could be made under section 402(c), 403(a)(4), 403(b)(8), 408(d)(3), or 457(e)(16), of the Internal Revenue Code of 1986, as the case may be.

“ (B) TREATMENT OF REPAYMENTS OF DISTRIBUTIONS FROM ELIGIBLE RETIREMENT PLANS OTHER THAN IRAS.--For purposes of the Internal Revenue Code of 1986, if a contribution is made pursuant to subparagraph (A) with respect to a qualified hurricane distribution from an eligible retirement plan other than an individual retirement plan, then the taxpayer shall, to the extent of the amount of the contribution, be treated as having received the qualified hurricane distribution in an eligible rollover distribution (as defined in section 402(c)(4) of such Code) and as having transferred the amount to the eligible retirement plan in a direct trustee to trustee transfer within 60 days of the distribution. (C) Treatment of repayments for distributions from iras.--For purposes of the Internal Revenue Code of 1986, if a contribution is made pursuant to subparagraph (A) with respect to a qualified hurricane distribution from an individual retirement plan (as defined by section 7701(a)(37) of such Code), then, to the extent of the amount of the contribution, the qualified hurricane distribution shall be treated as a distribution described in section 408(d)(3) of such Code and as having been transferred to the eligible retirement plan in a direct trustee to trustee transfer within 60 days of the distribution.

“(4) DEFINITIONS.--For purposes of this subsection--

“(A) QUALIFIED HURRICANE DISTRIBUTION.--Except as provided in paragraph (2), the term “qualified hurricane distribution” means--

“(i) any distribution from an eligible retirement plan made on or after August 23, 2017, and before January 1, 2019, to an individual whose principal place of abode on August 23, 2017, is located in the Hurricane Harvey disaster area and who has sustained an economic loss by reason of Hurricane Harvey,

“(ii) any distribution (which is not described in clause (i)) from an eligible retirement plan made on or after September 4, 2017, and before January 1, 2019, to an individual whose principal place of abode on September 4, 2017, is located in the Hurricane Irma disaster area and who has sustained an economic loss by reason of Hurricane Irma, and

“(iii) any distribution (which is not described in clause (i) or (ii)) from an eligible retirement plan made on or after September 16, 2017, and before January 1, 2019, to an individual whose principal place of abode on September 16, 2017, is located in the Hurricane Maria disaster area and who has sustained an economic loss by reason of Hurricane Maria.

“(B) ELIGIBLE RETIREMENT PLAN.--The term “eligible retirement plan” shall have the meaning given such term by section 402(c)(8)(B) of the Internal Revenue Code of 1986.

“(5) INCOME INCLUSION SPREAD OVER 3-YEAR PERIOD.--

“(A) IN GENERAL.--In the case of any qualified hurricane distribution, unless the taxpayer elects not to have this paragraph apply for any taxable year, any amount required to be included in gross income for such taxable year shall be so included ratably over the 3- taxable-year period beginning with such taxable year.

“(B) SPECIAL RULE.--For purposes of subparagraph (A), rules similar to the rules of subparagraph (E) of section 408A(d)(3) of the Internal Revenue Code of 1986 shall apply. (6) Special rules.--

“(A) EXEMPTION OF DISTRIBUTIONS FROM TRUSTEE TO TRUSTEE TRANSFER AND WITHHOLDING RULES.--For purposes of sections 401(a)(31), 402(f), and 3405 of the Internal Revenue Code of 1986, qualified hurricane distributions shall not be treated as eligible rollover distributions.

“(B) QUALIFIED HURRICANE DISTRIBUTIONS TREATED AS MEETING PLAN DISTRIBUTION REQUIREMENTS.--For purposes the Internal Revenue Code of 1986, a qualified hurricane distribution shall be treated as meeting the requirements of sections 401(k)(2)(B)(i), 403(b)(7)(A)(ii), 403(b)(11), and 457(d)(1)(A) of such Code.

“(b) RECONTRIBUTIONS OF WITHDRAWALS FOR HOME PURCHASES.--

“(1) RECONTRIBUTIONS.--

“(A) IN GENERAL.--Any individual who received a qualified distribution may, during the period beginning on August 23, 2017, and ending on February 28, 2018, make one or more contributions in an aggregate amount not to exceed the amount of such qualified distribution to an eligible retirement plan (as defined in section 402(c)(8)(B) of the Internal Revenue Code of 1986) of which such individual is a beneficiary and to which a rollover contribution of such distribution could be made under section 402(c), 403(a)(4), 403(b)(8), or 408(d)(3), of such Code, as the case may be.

“(B) TREATMENT OF REPAYMENTS.--Rules similar to the rules of subparagraphs (B) and (C) of subsection (a)(3) shall apply for purposes of this subsection.

“(2) QUALIFIED DISTRIBUTION.--For purposes of this subsection, the term “qualified distribution” means any distribution--

“(A) described in section 401(k)(2)(B)(i)(IV), 403(b)(7)(A)(ii) (but only to the extent such distribution relates to financial hardship), 403(b)(11)(B), or 72(t)(2)(F), of the Internal Revenue Code of 1986,

“(B) received after February 28, 2017, and before September 21, 2017, and

“(C) which was to be used to purchase or construct a principal residence in the Hurricane Harvey disaster area, the Hurricane Irma disaster area, or the Hurricane Maria disaster area, but which was not so purchased or constructed on account of Hurricane Harvey, Hurricane Irma, or Hurricane Maria.”

ELIGIBILITY FOR PARTICIPATION IN RETIREMENT PLANS

Section 825 of Pub. L. 109-280 provided that:

“An individual shall not be precluded from participating in an eligible deferred compensation plan by reason of having received a distribution under section 457(e)(9) of the Internal Revenue Code of 1986, as in effect prior to the enactment of the Small Business Job Protection Act of 1996.”

MODIFICATIONS OF RULES GOVERNING HARDSHIPS AND UNFORSEEN FINANCIAL EMERGENCIES

Section 826 of Pub. L. 109-280 provided that:

“Within 180 days after the date of the enactment of this Act, the Secretary of the Treasury shall modify the rules for determining whether a participant has had a hardship for purposes of section 401(k)(2)(B)(i)(IV) of the Internal Revenue Code of 1986 to provide that if an event (including the occurrence of a medical expense) would constitute a hardship under the plan if it occurred with respect to the participant's spouse or dependent (as defined in section 152 of such Code), such event shall, to the extent permitted under a plan, constitute a hardship if it occurs with respect to a person who is a beneficiary under the plan with respect to the participant. The Secretary of the Treasury shall issue similar rules for purposes of determining whether a participant has had--

“(1) a hardship for purposes of section 403(b)(11)(B) of such Code; or

“(2) an unforeseen financial emergency for purposes of sections 409A(a)(2)(A)(vi), 409A(a)(2)(B)(ii), and 457(d)(1)(A)(iii) of such Code.”

AMOUNT DISTRIBUTED MAY BE REPAID

Section 101(c)(1) of Pub. L. 109-73, before repeal by Pub. L. 109-135, Sec. 201(b)(4) (effective Dec. 21, 2005), provided that:

“(1) IN GENERAL.--Any individual who receives a qualified Hurricane Katrina distribution may, at any time during the 3-year period beginning on the day after the date on which such distribution was received, make one or more contributions in an aggregate amount not to exceed the amount of such distribution to an eligible retirement plan of which such individual is a beneficiary and to which a rollover contribution of such distribution could be made under section 402(c), 403(a)(4), 403(b)(8), 408(d)(3), or 457(e)(16) of such Code, as the case may be.”

EXCEPTION FOR NONELECTIVE DEFERRED COMPENSATION

Section 885(d)(3) of Pub. L. 108-357 provided that:

“The amendments made by this section [Sec. 885] shall not apply to any nonelective deferred compensation to which section 457 of the Internal Revenue Code of 1986 does not apply by reason of section 457(e)(12) of such Code, but only if such compensation is provided under a nonqualified deferred compensation plan--

“(A) which was in existence on May 1, 2004,

“(B) which was providing nonelective deferred compensation described in such section 457(e)(12) on such date, and

“(C) which is established or maintained by an organization incorporated on July 2, 1974.

If, after May 1, 2004, a plan described in the preceding sentence adopts a plan amendment which provides a material change in the classes of individuals eligible to participate in the plan, this paragraph shall not apply to any nonelective deferred compensation provided under the plan on or after the date of the adoption of the amendment.”

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. 1100-1147 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.

TRANSITIONAL RULES

Section 131(c)(2) of Pub. L. 95-600, as amended by Pub. L. 99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that:

‘(A) In general. - In the case of any taxable year beginning after December 31, 1978, and before January 1, 1982 -

‘(i) any amount of compensation deferred under a plan of a State providing for a deferral of compensation (other than a plan described in section 457(e)(2) of the Internal Revenue Code of 1986 (formerly I.R.C. 1954)), and any income attributable to the amounts so deferred, shall be includible in gross income only for the taxable year in which such compensation or other income is paid or otherwise made available to the participant or other beneficiary, but

‘(ii) the maximum amount of the compensation of any one individual which may be excluded from gross income by reason of clause (i) and by reason of section 457(a) of such Code during any such taxable year shall not exceed the lesser of -

‘(I) $7,500, or

‘(II) 33 1/3 percent of the participant's includible compensation.

‘(B) Application of catch-up provisions in certain cases. - If, in the case of any participant for any taxable year, all of the plans are eligible State deferred compensation plans, then clause (ii) of subparagraph (A) of this paragraph shall be applied with the modification provided by paragraph (3) of section 457(b) of such Code.

‘(C) Applications of certain coordination provisions. - In applying clause (ii) of subparagraph (A) of this paragraph and section 403(b)(2)(A)(ii) of such Code, rules similar to the rules of section 457(c)(2) of such Code shall apply.

‘(D) Meaning of terms. - Except as otherwise provided in this paragraph, terms used in this paragraph shall have the same meaning as when used in section 457 of such Code.’

DEFERRED COMPENSATION PLANS FOR STATE JUDGES

Section 131(c)(3) of Pub. L. 95-600, as added by Pub. L. 97-248, title II, Sec. 252, Sept. 3, 1982, 96 Stat. 532, and amended by Pub. L. 99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that:

‘(A) In general. - The amendments made by this section (enacting this section and provisions set out as notes under this section) shall not apply to any qualified State judicial plan.

‘(B) Qualified state judicial plan. - For purposes of subparagraph (A), the term ‘qualified State judicial plan’ means any retirement plan of a State for the exclusive benefit of judges or their beneficiaries if -

‘(i) such plan has been continuously in existence since December 31, 1978,

‘(ii) under such plan, all judges eligible to benefit under the plan -

‘(I) are required to participate, and

‘(II) are required to contribute the same fixed percentage of their basic or regular rate of compensation as judge,

‘(iii) under such plan, no judge has an option as to contributions or benefits the exercise of which would affect the amount of includible compensation,

‘(iv) the retirement payments of a judge under the plan are a percentage of the compensation of judges of that State holding similar positions, and

‘(v) the plan during any year does not pay benefits with respect to any participant which exceed the limitations of section 415(b) of the Internal Revenue Code of 1986 (formerly I.R.C. 1954).'

Sec. 457. Deferred Compensation Plans Of State And Local Governments And Tax-Exempt Organizations

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