Page:United States Statutes at Large Volume 95.djvu/310

 95 STAT. 284

PUBLIC LAW 97-34—AUG. 13, 1981 is required are at a rate (expressed as a percentage of compensation) not less than 7.5 percent." (c) CONFORMING AMENDMENTS.—

Ante, p. 274. 26 USC 401.

26 USC 408. 26 USC 1379. 26 USC 72.

(1) Subparagraphs (A) and (C) of section 219(b)(2), as amended by section SllTa), are each amended by striking out "$7,500" and inserting in lieu thereof "$15,000". (2) Subsection (e) of section 401 is amended by striking out "for all such years exceeds $7,500" and inserting in lieu thereof "for such taxable year exceeds $15,000". (3) Subparagraph (A) of section 4010'X2) (relating to benefit plans for self-employed individuals and shareholder-employees) is amended by striking out "$50,000" and inserting in lieu thereof "$100,000". (4) Paragraph (3) of section 401(j) is amended by adding at the end thereof the following new sentence: "For purposes of this paragraph, a change in the annual compensation taken into account under subparagraph (A) of subsection (j)(2) shall be treated as beginning a new period of plan participation.". (5) Subsections (d)(5) and (j) of section 408 are each amended by striking out "$7,500" and inserting in lieu thereof "$15,000. (6) Subparagraph (B) of section 1379(b)(1) (relating to certain qualified pension, etc., plans) is amended by striking out "$7,500" and inserting in lieu thereof "$15,000". (d) LOANS TO PARTICIPANTS.—Subsection (m) of section 72 (relating

to special rules) is amended— (1) by adding at the end of paragraph (6) the following new sentence: "For purposes of the preceding sentence, the term 'owner-employee' shall except in applying paragraph (5), include an employee within the meaning of section 401(c)(l).", and (2) by adding at the end thereof the following new paragraph: "(8) LOANS TO OWNER-EMPLOYEES.—If, during any taxable year, an owner-employee receives, directly or indirectly, any amount as a loan from a trust described in section 401(a) which is exempt from tax under section 501(a), such amount shall be treated as having been received by such owner-employee as a distribution from such trust." (e) CORRECTION OP EXCESS CONTRIBUTION PERMITTED WITHOUT PENALTY.—

(1) Subsection (m) of section 72 (relating to special rules applicable to employee annuities and distributions under employee plans) (as amended by subsection (d)) is amended by adding at the end thereof the following new paragraph: "(9) RETURN OF EXCESS CONTRIBUTIONS BEFORE DUE DATE OF RETURN.—

"(A) IN GENERAL.—If an excess contribution is distributed in a qualified distribution— "(i) such distribution of such excess contribution shall not be included in gross income, and "(ii) this section (other than this paragraph) shall be applied as if such excess contribution and such distribution had not been made. "(B) EXCESS CONTRIBUTION.—For purposes of this paragraph, the term 'excess contribution' means any contribution to a qualified trust described in section 401(a) or under a plan described in section 403(a) or 405(a) made on behalf of an employee (within the meaning of section 401(c)) for any taxable year to the extent such contribution exceeds the amount allowable as a deduction under section 404(a).

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