[Sec. 4980A was repealed by Pub. L. 105-34, Sec. 1073(a), effective for excess distributions received after December 31, 1996, except that
the repeal of Sec. 4980A(d) is effective for estates of
decedents dying after December 31, 1996.]
(Added by Pub. L. 99-514, title XI, 1133(a), Oct. 22, 1986, 100 Stat. 2481, 4981A; renumbered 4980A and amended
Pub. L. 100-647, title I, 1011A(g)(1)(A),
(2)-(6), (9), Nov. 10, 1988, 102 Stat. 3479-3482; Pub. L. 102-318, title V, Sec. 521(b)(42), July 3, 1992; Pub. L. 104-188, title I, Sec. 1401(b)(12), 1452(b), Aug. 20, 1996, 110 Stat. 1755;
repealed Pub. L. 105-34, title X, Sec. 1073(a), Aug. 5, 1997.)
BACKGROUND NOTES
AMENDMENTS
1997--Sec. 4980A. Pub. L. 105-34, Sec. 1073(a), repealed Section 4980A. Prior to repeal it read as follows:
“(a) General rule.—There is hereby imposed a tax equal to 15 percent of the excess
distributions with respect to any individual during any calendar year.
“(b) Liability for tax.—The individual with respect to whom the excess distributions
are made shall be liable for the tax imposed by subsection (a). The amount of the
tax imposed by subsection (a) shall be reduced by the amount
(if any) of the tax imposed by section 72(t) to the extent attributable to such excess
distributions.
“(c) Excess distributions.—For purposes of this section--
“(1) In general.—The term
“excess distributions” means the aggregate amount of the retirement distributions
with respect to any individual during any calendar year to the extent such amount
exceeds the greater of--
“(A) $150,000, or
“(B) $112,500 (adjusted at the same time and in the same manner as under section 415(d)).
“(2) Exclusion of certain distributions.—The following distributions shall not be
taken into account under paragraph
(1):
“(A) Any retirement distribution with respect to an individual made after the death
of such individual.
“(B) Any retirement distribution with respect to an individual payable to an alternate
payee pursuant to a qualified domestic relations order (within the meaning of section
414(p)) if includible in income of the alternate payee.
“(C) Any retirement distribution with respect to an individual which is attributable
to the individual's investment in the contract (as defined in section 72(f)).
“(D) Any retirement distribution to the extent not included in gross income by reason
of a rollover contribution.
“(E) Any retirement distribution with respect to an individual of an annuity contract
the value of which is not includible in gross income at the time of the distribution
(other than distributions under, or proceeds from the sale or exchange of, such contract).
“(F) Any retirement distribution with respect to an individual of--
“(i) excess deferrals (and income allocable thereto) under section 402(g)(2)(A)(ii),
or
“(ii) excess contributions (and income allocable thereto) under section 401(k)(8)
or 408(d)(4) or excess aggregate contributions (and income allocable thereto) under
section 401(m)(6).
“Any distribution described in subparagraph
(B) shall be treated as a retirement distribution to the person to whom paid for purposes
of this section.
“(3) Aggregation of payments.—If retirement distributions with respect to any individual
during any calendar year are received by the individual and 1 or more other persons,
all such distributions shall be aggregated for purposes of determining the amount
of the excess distributions for the calendar year.
“(4) Special one-time election. —If the retirement distributions with respect to any
individual during any calendar year include a lump sum distribution to which an election
under section 402(d)(4)(B) applies--
“(A) paragraph (1) shall be applied separately with respect to such lump sum distribution
and other retirement distributions, and
“(B) the limitation under paragraph
(1) with respect to such lump sum distribution shall be equal to 5 times the amount
of such limitation determined without regard to this subparagraph.
“An individual may elect to have this paragraph apply to only one lump-sum distribution.
“(d) Increase in estate tax if individual dies with excess accumulation.—
“(1) In general.—The tax imposed by chapter 11 with respect to the estate of any individual
shall be increased by an amount equal to 15 percent of the individual's excess retirement
accumulation.
“(2) No credit allowable.—No credit shall be allowable under chapter 11 with respect
to any portion of the tax imposed by chapter 11 attributable to the increase under
paragraph (1).
“(3) Excess retirement accumulation.—For purposes of paragraph (1), the term “excess
retirement accumulation"
means the excess (if any) of--
“(A) the value of the individual's interests (other than as a beneficiary, determined
after application of paragraph (5)) in qualified employer plans and individual retirement
plans as of the date of the decedent's death (or, in the case of an election under
section 2032, the applicable valuation date prescribed by such section), over
“(B) the present value (as determined under rules prescribed by the Secretary as of
the valuation date prescribed in subparagraph (A)) of a single life annuity with annual
payments equal to the limitation of subsection (c) (as in effect for the year in which
death occurs and as if the individual had not died).
“(4) Rules for computing excess retirement accumulation.—The excess retirement accumulation
of an individual shall be computed without regard to--
“(A) any community property law,
“(B) the value of--
“(i) amounts payable to an alternate payee pursuant to a qualified domestic relations
order (within the meaning of section 414(p)) if includible in income of the alternate
payee, and
“(ii) the individual's investment in the contract (as defined in section 72(f)), and
“(C) the excess (if any) of--
“(i) any interests which are payable immediately after death, over
“(ii) the value of such interests immediately before death.
“(5) Election by spouse to have excess distribution rule apply.—
“(A) In general.—If the spouse of an individual is the beneficiary of all of the interests
described in paragraph
(3)(A), the spouse may elect--
“(i) not to have this subsection apply, and
“(ii) to have this section apply to such interests and any retirement distribution
attributable to such interests as if such interests were the spouse's.
“(B) De minimis exception
If 1 or more persons other than the spouse are beneficiaries of a de minimis portion
of the interests described in paragraph (3)(A)--
“(i) the spouse shall not be treated as failing to meet the requirements of subparagraph
(A), and
“(ii) if the spouse makes the election under subparagraph (A), this section shall
not apply to such portion or any retirement distribution attributable to such portion.
“(e) Retirement distributions
For purposes of this section--
“(1) In general
The term “retirement distribution” means, with respect to any individual, the amount
distributed during the taxable year under--
“(A) any qualified employer plan with respect to which such individual is or was the
employee, and
“(B) any individual retirement plan.
“(2) Qualified employer plan.—The term “qualified employer plan” means--
“(A) any plan described in section 401(a) which includes a trust exempt from tax under
section 501(a),
“(B) an annuity plan described in section 403(a), or
“(C) an annuity contract described in section 403(b).
“Such term includes any plan or contract which, at any time, has been determined by
the Secretary to be such a plan or contract.
“(f) Exemption of accrued benefits in excess of $562,500 on August 1, 1986.—For purposes
of this section--
“(1) In general.—If an election is made with respect to an eligible individual to
have this subsection apply, the individual's excess distributions and excess retirement
accumulation shall be computed without regard to any distributions or interests attributable
to the accrued benefit of the individual as of August 1, 1986.
“(2) Reduction in amounts which may be received without tax.—If this subsection applies
to any individual--
“(A) Excess distributions.—Subsection
(c)(1) shall be applied--
“(i) without regard to subparagraph
(A), and
“(ii) by reducing (but not below zero) the amount determined under subparagraph (B)
thereof by retirement distributions attributable (as determined under rules prescribed
by the Secretary) to the individual's accrued benefit as of August 1, 1986.
“(B) Excess retirement accumulation.—The amount determined under subsection (d)(3)(B)
(without regard to subsection
(c)(1)(A)) with respect to such individual shall be reduced (but not below zero) by
the present value of the individual's accrued benefit as of August 1, 1986, which
has not been distributed as of the date of death.
“(3) Eligible individual.—For purposes of this subsection, the term “eligible individual”
means any individual if, on August 1, 1986, the present value of such individual's
interests in qualified employer plans and individual retirement plans exceeded $562,500.
“(4) Certain amounts excluded.—In determining an individual's accrued benefit for
purposes of this subsection, there shall not be taken into account any portion of
the accrued benefit--
“(A) payable to an alternate payee pursuant to a qualified domestic relations order
(within the meaning of section 414(p)) if includible in income of the alternate payee,
or
“(B) attributable to the individual's investment in the contract (as defined in section
72(f)).
“(5) Election.—An election under paragraph (1) shall be made on an individual's return
of tax imposed by chapter 1 or 11 for a taxable year beginning before January 1, 1989.
“(g) Limitation on application.—This section shall not apply to distributions during
years beginning after December 31, 1996, and before January 1, 2000, and such distributions
shall be treated as made first from amounts not described in subsection
(f).”
1996--Subsec. (c)(4). Pub. L. 104-188, 1401(b)(12) substituted
“(as defined in section 402(e)(4)(D)) with respect to which the individual elects
to have this paragraph apply” for “to which an election under section 402(d)(4)(B)
applies”.
Subsec. (c)(4). Pub. L. 104-188, 1401(b)(12), added the flush sentence at the end, and substituted “Special one-time
election” for “Special rule where taxpayer elects income averaging” in the heading.
Subsec. (g). Pub. L. 104-188, 1452(b), added subsec. (g).
1992—Subsec. (c)(4). Pub. L. 102-318, Sec. 521(b)(42), amended par. (4) by substituting “section 402(d)(4)(B)”
for ‘section 402(e)(4)(B)”.
1988--Pub. L. 100-647, 1011A(g)(1)(A), renumbered section 4981A of this title as this section.
Subsec. (c)(1). Pub. L. 100-647, 1011A(g)(2), substituted “the greater of--” for “$112,500 (adjusted at the same
time and in the same manner as under section 415(d))” and added subpars. (A) and (B).
Subsec. (c)(2)(C). Pub. L. 100-647, 1011A(g)(3)(A), substituted “individual's"
for “employee's”.
Subsec. (c)(2)(E), (F). Pub. L. 100-647, 1011A(g)(3)(B), added subpars. (E) and (F).
Subsec. (c)(5). Pub. L. 100-647, 1011A(g)(4)(B), struck out par. (5) which related to special rule for accrued benefits
as of Aug. 1, 1986.
Subsec. (d)(2). Pub. L. 100-647, 1011A(g)(5)(A), substituted “chapter 11” for “section 2010”.
Subsec. (d)(3)(A). Pub. L. 100-647, 1011A(g)(9), inserted “(other than as a beneficiary, determined after application
of paragraph (5))” after
“individual's interests”.
Subsec. (d)(3)(B). Pub. L. 100-647, 1011A(g)(6), amended subpar. (B) generally. Prior to amendment, subpar. (B) read
as follows: “the present value
(as determined under rules prescribed by the Secretary as of the valuation date prescribed
in subparagraph (A)) of an annuity for a term certain--
“(i) with annual payments equal to the limitation of subsection (c) (as in effect
for the year in which the death occurs), and
“(ii) payable for a period equal to the life expectancy of the individual immediately
before his death.”
Subsec. (d)(4), (5). Pub. L. 100-647, 1011A(g)(5)(B), added pars. (4) and (5).
Subsec. (f). Pub. L. 100-647, 1011A(g)(4)(A), added subsec. (f).
EFFECTIVE DATE OF REPEAL
Effective for excess distributions received after December 31, 1996, except that the
repeal of Sec. 4980A(d) is effective for estates of decedents dying after December
31, 1996.
EFFECTIVE DATE OF 1996 AMENDMENT
Amendment by Pub. L. 104-188, Sec. 1401(b), effective for taxable years beginning after December 31, 1999. Sec. 1401(c)(2) provided
the following transition rule:
“(2) Retention of certain transition rules.--The amendments made by this section shall
not apply to any distribution for which the taxpayer is eligible to elect the benefits
of section 1122(h)(3) or (h)(5) of the Tax Reform Act of 1986. Notwithstanding the
preceding sentence, individuals who elect such benefits after December 31, 1999, shall
not be eligible for 5-year averaging under section 402(d) of the Internal Revenue Code of 1986 (as in effect immediately before such amendments).”
Amendment by Pub. L. 104-188, Sec. 1452(b), effective for years beginning after December 31, 1996.
EFFECTIVE DATE OF 19962 AMENDMENT
Amendment by Pub. L. 102-318, Sec. 521(b)(42), effective for distributions after December 31, 1992.
EFFECTIVE DATE OF 1988 AMENDMENT
Amendment by Pub. L. 100-647 effective, except as otherwise provided, as if included in the provision of the Tax
Reform Act of 1986, Pub. L. 99-514, to which such amendment relates, see section 1019(a) of Pub. L. 100-647, set out as a note under section 1 of this title.
EFFECTIVE DATE
Section 1133(c) of Pub. L. 99-514, as amended by Pub. L. 100-647, title I, 1011A(g)(8), Nov. 10, 1988, 102 Stat. 3482, provided that:
“(1) In general.--Except as provided in this subsection, the amendments made by this
section [enacting this section], shall apply to distributions made after December
31, 1986, other than a distribution with respect to a decedent dying before January
1, 1987.
“(2) Estate tax.--Section 4981A(d) [probably should be 4980A(d)] of the Internal Revenue
Code of 1986 (as added by subsection
(a)) shall apply to the estates of decedents dying after December 31, 1986.
“(3) Plan terminations before 1987.--The amendments made by this section shall not
apply to distributions before January 1, 1988, which are made on account of the termination
of a qualified employer plan if such termination occurred before January 1, 1987.”
PLAN AMENDMENTS NOT REQUIRED UNTIL JANUARY 1, 1989
For provisions directing that if any amendments made by section 1133(a) 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, set out as a note under section 401 of this title.
ISSUANCE OF FINAL REGULATIONS
The Secretary of the Treasury or a delegate of the Secretary shall issue before Feb.
1, 1988, final regulations to carry out this section, see section 1141 of Pub. L. 99-514, set out as a note under section 401 of this title.
