Page:United States Statutes at Large Volume 92 Part 3.djvu/166

 92 STAT. 2798

PUBLIC LAW 95-600—NOV. 6, 1978 "(D) TREATMENT OF CERTAIN CONTRIBUTIONS AND TAXES.—

Except as provided in this subparagraph, employer contributions do not meet the requirements of this paragraph unless such contributions meet the requirements of this paragraph without taking into account contributions or benefits under chapter 2 (relating to tax on self-employment income), chapter 21 (relating to Federal Insurance Contribution Act), title II of the Social Security Act, or any other Federal or State law. Taxes paid under section 3111 (relating to tax on employers) with respect to an employee may, for purposes of this paragraph, be taken into account as a contribution by the employer to an employee's simplified employee pension. If contributions are made to the simplified employee pension of an owner-employee, the preceding sentence shall not apply unless taxes paid by all such owner-employees under chapter 2, and the taxes which would be payable under chapter 2 by such owner-employees but for paragraphs (4) and (5) of section 1402(c), are taken into account as contributions by the employer on behalf of such owner-employees. "(4) WITHDRAWALS MUST BE PERMITTED.—A simplified employee pension meets the requirements of this paragraph only if— "(A) employer contributions thereto are not conditioned on the retention in such pension of any portion of the amount contributed, and "(B) there is no prohibition imposed by the employer on withdrawals from the simplified employee pension.

26 USC 1401. 26 USC 3101. 42 USC 401. 26 USC 3111.

26 USC 1402.

"(5) CONTRIBUTIONS MUST BE MADE UNDER WRITTEN ALLOCATION

FORMULA.—The requirements of this paragraph are met with respect to a simplified employee pension only if employer contributions to such pension are determined under a definite written allocation formula which specifies— "(A) the requirements which an employee must satisfy to share in an allocation, and "(B) the manner in which the amount allocated is computed. "(6) DEFINITIONS.—For purposes of this subsection and subsection (D— "(A)

EMPLOYEE, EMPLOYER, OR OWNER-EMPLOYEE.—The

terms 'employee', 'employer', and 'owner-employee' shall have the respective meanings given such terms by section 401(c).

26 USC 401.

"(B) COMPENSATION.—The term 'compensation'means, in

"

26 USC 219.

the case of an employee within the meaning of section 401(c)(1), earned income within the meaning of section 401(c)(2). "(1) SiMPUFiED EMPLOYER REPORTS.—An employer who makes a contribution on behalf of an employee to a simplified employee pension shall provide such simplified reports with respect to such contributions as the Secretary may require by regulations. The reports required by this subsection shall be filed at such time and in such manner, and information with respect to such contributions shall be furnished to the employee at such time and in such manner, as may be required by regulations." (c) MAXIMUM DEDUCTION UNDER SECTION 219.—Subsection (b) of section 219 (relating to maximum deduction in the case of retirement

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