Page:United States Statutes at Large Volume 120.djvu/1069

 120 STAT. 1038

‘‘(5) APPLICABLE EMPLOYER PLAN.—For purposes of this subsection, the term ‘applicable employer plan’ means— ‘‘(A) an employees’ trust described in section 401(a) which is exempt from tax under section 501(a), ‘‘(B) a plan under which amounts are contributed by an individual’s employer for an annuity contract described in section 403(b), and ‘‘(C) an eligible deferred compensation plan described in section 457(b) which is maintained by an eligible employer described in section 457(e)(1)(A). ‘‘(6) SPECIAL RULE.—A withdrawal described in paragraph (1) (subject to the limitation of paragraph (2)(C)) shall not be taken into account for purposes of section 401(k)(3).’’. (2) VESTING CONFORMING AMENDMENTS.— (A) Section 411(a)(3)(G) of such Code is amended by inserting ‘‘an erroneous automatic contribution under section 414(w),’’ after ‘‘402(g)(2)(A),’’. (B) The heading of section 411(a)(3)(G) of such Code is amended by inserting ‘‘OR ERRONEOUS AUTOMATIC CONTRIBUTION’’ before the period. (C) Section 401(k)(8)(E) of such Code is amended by inserting ‘‘an erroneous automatic contribution under section 414(w),’’ after ‘‘402(g)(2)(A),’’. (D) The heading of section 401(k)(8)(E) of such Code is amended by inserting ‘‘OR ERRONEOUS AUTOMATIC CONTRIBUTION’’ before the period. (E) Section 203(a)(3)(F) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1053(a)(3)(F)) is amended by inserting ‘‘an erroneous automatic contribution under section 414(w) of such Code,’’ after ‘‘402(g)(2)(A) of such Code,’’. (e) EXCESS CONTRIBUTIONS.— (1) EXPANSION OF CORRECTIVE DISTRIBUTION PERIOD FOR AUTOMATIC CONTRIBUTION ARRANGEMENTS.—Subsection (f) of section 4979 of the Internal Revenue Code of 1986 is amended— (A) by inserting ‘‘(6 months in the case of an excess contribution or excess aggregate contribution to an eligible automatic contribution arrangement (as defined in section 1⁄2 months’’ in paragraph (1), and 414(w)(3)))’’ after ‘‘2 1⁄2 MONTHS OF’’ in the heading and (B) by striking ‘‘2 inserting ‘‘SPECIFIED PERIOD AFTER’’. (2) YEAR OF INCLUSION.—Paragraph (2) of section 4979(f) of such Code is amended to read as follows: ‘‘(2) YEAR OF INCLUSION.—Any amount distributed as provided in paragraph (1) shall be treated as earned and received by the recipient in the recipient’s taxable year in which such distributions were made.’’. (3) SIMPLIFICATION OF ALLOCABLE EARNINGS.— (A) SECTION 4979.—Paragraph (1) of section 4979(f) of such Code is amended by adding ‘‘through the end of the plan year for which the contribution was made’’ after ‘‘thereto’’. (B) SECTION 401(k) AND 401(m).— (i) Clause (i) of section 401(k)(8)(A) of such Code is amended by adding ‘‘through the end of such year’’ after ‘‘such contributions’’.

26 USC 411.

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PUBLIC LAW 109–280—AUG. 17, 2006

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