§ 4973. Tax on excess contributions to certain tax-favored accounts and annuities

Editorial Notes

Amendments

2025—Subsec. (h)(1). Pub. L. 119–21 inserted “or contributions received in a qualified ABLE rollover contribution described in section 530A(d)(4)(B)” after “other than contributions under section 529A(c)(1)(C)”.

2022—Subsec. (b). Pub. L. 117–328 inserted at end of concluding provisions: “Such term shall not include any designated nondeductible contribution (as defined in subparagraph (C) of section 408(o)(2)) which does not exceed the nondeductible limit under subparagraph (B) thereof by reason of an election under section 408(o)(5).”

2014—Subsec. (a)(6). Pub. L. 113–295, § 102(b)(1), added par. (6).

Subsec. (h). Pub. L. 113–295, § 102(b)(2), added subsec. (h).

2004—Subsec. (c). Pub. L. 108–311 substituted “subsection (a)(3)” for “subsection (a)(2)” in introductory provisions.

2003—Subsec. (a)(5). Pub. L. 108–173, § 1201(e)(1), added par. (5).

Subsec. (g). Pub. L. 108–173, § 1201(e)(2), added subsec. (g).

2001—Subsec. (a)(4). Pub. L. 107–22, § 1(b)(1)(C), substituted “a Coverdell education savings” for “an education individual retirement”.

Subsec. (b)(1)(A). Pub. L. 107–16, § 641(e)(11), substituted “408(d)(3), or 457(e)(16)” for “or 408(d)(3)”.

Subsec. (e). Pub. L. 107–22, § 1(b)(4), substituted “Coverdell education savings” for “education individual retirement” in heading.

Pub. L. 107–16, § 402(a)(4)(A), which directed the substitution of “qualified tuition” for “qualified State tuition” wherever appearing in subsec. (e), could not be executed because the term “qualified State tuition” did not appear subsequent to amendment by section 401(g)(2)(D) of Pub. L. 107–16, which struck out par. (1)(B). See below.

Subsec. (e)(1). Pub. L. 107–22, § 1(b)(2)(B), substituted “Coverdell education savings” for “education individual retirement” in introductory provisions.

Subsec. (e)(1)(A). Pub. L. 107–16, § 401(a)(2), (g)(2)(D), substituted “$2,000” for “$500” and inserted “and” at end.

Subsec. (e)(1)(B), (C). Pub. L. 107–16, § 401(g)(2)(D), redesignated subpar. (C) as (B) and struck out former subpar. (B) which read as follows: “if any amount is contributed (other than a contribution described in section 530(b)(2)(B)) during such year to a qualified State tuition program for the benefit of such beneficiary, any amount contributed to such accounts for such taxable year; and”.

Subsec. (e)(2)(A). Pub. L. 107–22, § 1(b)(2)(B), substituted “Coverdell education savings” for “education individual retirement”.

2000—Subsec. (a)(2). Pub. L. 106–554, § 1(a)(7) [title II, § 202(b)(10)], substituted “an Archer” for “a Archer”.

Pub. L. 106–554, § 1(a)(7) [title II, § 202(a)(6)], substituted “Archer MSA” for “medical savings account”.

Subsec. (d). Pub. L. 106–554, § 1(a)(7) [title II, § 202(a)(6), (b)(2)(C), (6)], substituted “Archer MSAs” for “medical savings accounts” in heading, “Archer MSAs” for “medical savings accounts” in introductory provisions, and “Archer MSA” for “medical savings account” in concluding provisions.

1998—Pub. L. 105–206, § 6023(18)(A), amended section catchline generally. Prior to amendment, catchline read as follows: “Tax on excess contributions to individual retirement accounts, medical savings accounts, certain section 403(b) contracts, and certain individual retirement annuities”.

Subsec. (b)(1)(A). Pub. L. 105–206, § 6005(b)(8)(B)(i), inserted “a contribution to a Roth IRA or” after “other than”.

Subsec. (b)(2)(C). Pub. L. 105–206, § 6005(b)(8)(B)(ii), inserted “(including the amount contributed to a Roth IRA)” after “annuities”.

Subsec. (e)(1). Pub. L. 105–206, § 6004(d)(10)(A), reenacted heading without change and amended text of par. (1) generally. Prior to amendment, text read as follows: “In the case of education individual retirement accounts maintained for the benefit of any 1 beneficiary, the term ‘excess contributions’ means—

“(A) the amount by which the amount contributed for the taxable year to such accounts exceeds $500, and

“(B) any amount contributed to such accounts for any taxable year if any amount is contributed during such year to a qualified State tuition program for the benefit of such beneficiary.”

Subsec. (e)(2)(B), (C). Pub. L. 105–206, § 6004(d)(10)(B), redesignated subpar. (C) as (B) and struck out former subpar. (B) which read as follows: “Any contribution described in section 530(b)(2)(B) to a qualified State tuition program.”

Subsec. (f). Pub. L. 105–206, § 6005(b)(8)(C), made technical amendment to directory language of Pub. L. 105–34, § 302(b). See 1997 Amendment note below.

Subsec. (f)(1)(A). Pub. L. 105–206, § 6005(b)(8)(A)(i), substituted “Roth IRAs” for “such accounts”.

Subsec. (f)(2)(B). Pub. L. 105–206, § 6005(b)(8)(A)(ii), substituted “by the individual to all individual retirement plans” for “to the accounts”.

1997—Subsec. (a)(4). Pub. L. 105–34, § 213(d)(1), added par. (4).

Subsec. (d). Pub. L. 105–33 inserted “or section 138(c)(3)” after “section 220(f)(3)” in concluding provisions.

Subsec. (e). Pub. L. 105–34, § 213(d)(2), added subsec. (e).

Subsec. (f). Pub. L. 105–34, § 302(b), as amended by Pub. L. 105–206, § 6005(b)(8)(C), added subsec. (f).

1996—Pub. L. 104–191, § 301(e)(1), inserted “medical savings accounts,” after “accounts,” in section catchline.

Subsec. (a). Pub. L. 104–191, § 301(e)(1)–(3), struck out “or” at end of par. (1), added par. (2), and redesignated former par. (2) as (3).

Subsec. (b)(1)(A). Pub. L. 104–188, § 1704(t)(72), provided that section 521(b)(41) of Pub. L. 102–318 shall be applied as if “section” appeared instead of “sections” in the material proposed to be stricken. See 1992 Amendment note below.

Pub. L. 104–188, § 1704(t)(70), substituted “section” for “sections”.

Subsec. (d). Pub. L. 104–191, § 301(e)(4), added subsec. (d).

1992—Subsec. (b)(1)(A). Pub. L. 102–318, which directed the substitution of “sections 402(c)” for “sections 402(a)(5), 402(a)(7)”, was executed by substituting “sections 402(c)” for “section 402(a)(5), 402(a)(7)”. See 1996 Amendment note above.

1988—Subsec. (b). Pub. L. 100–647 substituted “shall be computed without regard to section 219(g)” for “(after application of section 408(o)(2)(B)(ii)) shall be increased by the nondeductible limit under section 408(o)(2)(B)” in last sentence.

1986—Subsec. (b). Pub. L. 99–514, § 1102(b)(1), inserted at end “For purposes of paragraphs (1)(B) and (2)(C), the amount allowable as a deduction under section 219 (after application of section 408(o)(2)(B)(ii)) shall be increased by the nondeductible limit under section 408(o)(2)(B).”

Pub. L. 99–514, § 1848(f), in introductory provisions, substituted “or individual retirement annuities” for “, individual retirement annuities, or bonds”, in par. (1)(A), substituted “(other than a rollover contribution described in section 402(a)(5), 402(a)(7), 403(a)(4), 403(b)(8), or 408(d)(3)), over” for “or bonds (other than a rollover contribution described in section 402(a)(5), 402(a)(7), 403(a)(4), 403(b)(8), 405(d)(3), or 408(d)(3)), over”, and in par. (2)(A), struck out “or bonds” after “for the annuities”.

1984—Pub. L. 98–369, § 491(d)(55), substituted “and certain individual retirement annuities” for “certain individual retirement annuities, and certain retirement bonds” in section catchline.

Subsec. (a). Pub. L. 98–369, § 491(d)(41), inserted “or” at end of par. (1), struck out “or” at end of par. (2), struck out par. (3) which imposed a tax in the case of a retirement bond, within the meaning of section 409, established for the benefit of any individual, and in the concluding provision substituted “or annuity” for “, annuity, or bond” and “or annuities” for “, annuities, or bonds”.

Subsec. (b). Pub. L. 98–369, § 491(d)(43), substituted in provision following par. (2)(C) “or the individual retirement annuity” for “, individual retirement annuity, or bond”.

Subsec. (b)(1)(A). Pub. L. 98–369, § 491(d)(42), which directed the amendment of subpar. (A) by substituting “and 408(d)(3)” for “408(d)(3), and 409(b)(3)(C)” was executed, as the probable intent of Congress, by substituting “or 408(d)(3))” for “408(d)(3)), or 409(b)(3)(C)”.

Subsec. (c)(1). Pub. L. 98–369, § 491(d)(44), substituted “or 408(d)(3)(A)(iii)” for “, 408(d)(3)(A)(iii), or 409(b)(3)(C)”.

1981—Subsec. (a). Pub. L. 97–34, § 311(h)(9), substituted “The tax imposed by this subsection shall be paid by such individual” for “The tax imposed by this subsection shall be paid by the individual to whom a deduction is allowed for the taxable year under section 219 (determined without regard to subsection (b)(1) thereof) or section 220 (determined without regard to subsection (b)(1) thereof), whichever is appropriate”.

Subsec. (b)(1)(A). Pub. L. 97–34, § 313(b)(2), inserted “405(d)(3),” after “403(b)(8),”.

Subsec. (b)(1)(B). Pub. L. 97–34, § 311(h)(7), substituted “section 219” for “section 219 or 220”.

Subsec. (b)(2)(C). Pub. L. 97–34, § 311(h)(7), (10), substituted “section 219” for “section 219 or 220”, and “section 219(f)(6)” for “sections 219(c)(5) and 220(c)(6)”.

1980—Subsec. (b)(1)(A). Pub. L. 96–222, § 101(a)(14)(B), inserted reference to section 402(a)(7).

Subsec. (c)(1). Pub. L. 96–222, § 101(a)(13)(C), substituted “409(b)(3)(C)” for “409(d)(3)(C)”.

1978—Subsec. (b)(1)(A). Pub. L. 95–600, § 156(c)(3), inserted reference to section 403(b)(8).

Subsec. (b)(2). Pub. L. 95–600, § 157(b)(3), substituted “reduced by the sum of—” for “reduced by the excess (if any) of”, struck out “the maximum amount allowable as a deduction under section 219 or 220 for the taxable year over the amount contributed to the accounts or for the annuities or bonds for the taxable years and reduced by the sum of the distributions out of the account (for the taxable year and all prior taxable years) which were included in the gross income of the payee under section 408(d)(1)” in provision preceding par. (A), and added subpars. (A), (B), and (C).

Subsec. (b). Pub. L. 95–600, §§ 157(j)(1), 701(aa)(1), struck out in last sentence “if such distribution consists of an excess contribution solely because of employer contributions to a plan or contract described in section 219(b)(2) or by reason of the application of section 219(b)(1) (without regard to the $1,500 limitation) or section 220(b)(1) (without regard to the $1,750 limitation) and only if such distribution does not exceed the excess of $1,500 or $1,750 if applicable, over the amount described in paragraph (1)(B)” after “as an amount not contributed”.

Subsec. (c)(1). Pub. L. 95–600, § 156(c)(5), inserted “(other than a rollover contribution described in section 403(b)(8), 408(d)(3)(A)(iii), or 409(d)(3)(C))” after “account”.

1976—Subsec. (a)(3). Pub. L. 94–455, §§ 1501(b)(8)(A), 1904(a)(22)(A), substituted “the individual to whom a deduction is allowed for the taxable year under section 219 (determined without regard to subsection (b)(1) thereof) or section 220 (determined without regard to subsection (b)(1) thereof), whichever is appropriate” for “such individual”, effective for taxable years beginning after December 31, 1976 and substituted “such individual” for “the individual to whom a deduction is allowed for the taxable year under section 219 (determined without regard to subsection (b)(1) thereof) or section 220 (determined without regard to subsection (b)(1) thereof), whichever is appropriate”, effective for the first day of the first month which begins more than 90 days after Oct. 4, 1976.

Subsec. (b)(1)(B). Pub. L. 94–455, § 1501(b)(8)(B), inserted “or 220” after “under section 219”.

Subsec. (b)(2). Pub. L. 94–455, § 1501(b)(8)(C), inserted “or 220” after “under section 219” and “the taxable year and” before “all prior taxable years” and struck out provisions relating to the treatment of contributions out of individual retirement accounts, annuities or bonds to which section 408(d)(4) applied.

Subsec. (c). Pub. L. 94–455, § 1904(a)(22)(B), substituted “subsection (a)(2)” for “subsection (a)(3)” in provisions preceding par. (1).

Statutory Notes and Related Subsidiaries

Effective Date of 2025 Amendment

Amendment by Pub. L. 119–21 applicable to taxable years beginning after Dec. 31, 2025, see section 70204(e) of Pub. L. 119–21, set out as an Effective Date note under section 128 of this title.

Effective Date of 2022 Amendment

Amendment by Pub. L. 117–328 effective as if included in the section of div. O of Pub. L. 116–94 to which the amendment relates, see section 401(c) of Pub. L. 117–328, set out as a note under section 72 of this title.

Effective Date of 2014 Amendment

Amendment by Pub. L. 113–295 applicable to taxable years beginning after Dec. 31, 2014, see section 102(f)(1) of Pub. L. 113–295, set out as a note under section 552a of Title 5, Government Organization and Employees.

Effective Date of 2003 Amendment

Amendment by Pub. L. 108–173 applicable to taxable years beginning after Dec. 31, 2003, see section 1201(k) of Pub. L. 108–173, set out as a note under section 62 of this title.

Effective Date of 2001 Amendments

Amendment by Pub. L. 107–22 effective July 26, 2001, see section 1(c) of Pub. L. 107–22, set out as a note under section 26 of this title.

Amendment by section 401(a)(2), (g)(2)(D) of Pub. L. 107–16 applicable to taxable years beginning after Dec. 31, 2001, see section 401(h) of Pub. L. 107–16, set out as a note under section 25A of this title.

Amendment by section 402(a)(4)(A) of Pub. L. 107–16 applicable to taxable years beginning after Dec. 31, 2001, see section 402(h) of Pub. L. 107–16, set out as a note under section 72 of this title.

Amendment by section 641(e)(11) of Pub. L. 107–16 applicable to distributions after Dec. 31, 2001, see section 641(f)(1) of Pub. L. 107–16, set out as a note under section 402 of this title.

Effective Date of 1998 Amendment

Amendment by section 6023(18)(A) of Pub. L. 105–206 effective July 22, 1998, see section 6023(32) of Pub. L. 105–206, set out as a note under section 34 of this title.

Amendment by sections 6004(d)(10) and 6005(b)(8) of Pub. L. 105–206 effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997, Pub. L. 105–34, to which such amendment relates, see section 6024 of Pub. L. 105–206, set out as a note under section 1 of this title.

Effective Date of 1997 Amendments

Amendment by section 213(d) of Pub. L. 105–34 applicable to taxable years beginning after Dec. 31, 1997, see section 213(f) of Pub. L. 105–34, set out as a note under section 26 of this title.

Amendment by section 302(b) of Pub. L. 105–34 applicable to taxable years beginning after Dec. 31, 1997, see section 302(f) of Pub. L. 105–34, set out as a note under section 219 of this title.

Amendment by Pub. L. 105–33 applicable to taxable years beginning after Dec. 31, 1998, see section 4006(c) of Pub. L. 105–33, set out as an Effective Date note under section 138 of this title.

Effective Date of 1996 Amendment

Amendment by Pub. L. 104–191 applicable to taxable years beginning after Dec. 31, 1996, see section 301(j) of Pub. L. 104–191, set out as a note under section 62 of this title.

Effective Date of 1992 Amendment

Amendment by Pub. L. 102–318 applicable to distributions after Dec. 31, 1992, see section 521(e) of Pub. L. 102–318, set out as a note under section 402 of this title.

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 of 1986 Amendment

Amendment by section 1102(b)(1) of Pub. L. 99–514 applicable to contributions and distributions for taxable years beginning after Dec. 31, 1986, see section 1102(g) of Pub. L. 99–514, set out as a note under section 219 of this title.

Amendment by section 1848(f) of Pub. L. 99–514 effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984, Pub. L. 98–369, div. A, to which such amendment relates, see section 1881 of Pub. L. 99–514, set out as a note under section 48 of this title.

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 1981 Amendment

Amendment by section 311(h)(7), (9), (10) of Pub. L. 97–34 applicable to taxable years beginning after Dec. 31, 1981, see section 311(i)(1) of Pub. L. 97–34, set out as a note under section 219 of this title.

Amendment by section 313(b)(2) of Pub. L. 97–34 applicable to redemptions after Aug. 13, 1981, in taxable years ending after such date, see section 313(c) of Pub. L. 97–34, set out as a note under section 219 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 provision 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 22 of this title.

Effective Date of 1978 Amendment

Amendment by section 156(c)(3), (5) of Pub. L. 95–600 applicable to distributions or transfers made after Dec. 31, 1977, in taxable years beginning after such date, see section 156(d) of Pub. L. 95–600, set out as a note under section 403 of this title.

Amendment by section 157(b)(3) of Pub. L. 95–600 applicable to determination of deductions for taxable years beginning after Dec. 31, 1975, see section 157(b)(4)(A) of Pub. L. 95–600, set out as a note under section 219 of this title.

Pub. L. 95–600, title I, § 157(j)(2), Nov. 6, 1978, 92 Stat. 2809, provided that: “The amendment made by paragraph (1) [amending this section] shall apply to contributions made for taxable years beginning after December 31, 1977.”

Pub. L. 95–600, title VII, § 701(aa)(2), Nov. 6, 1978, 92 Stat. 2921, provided that: “The amendment made by paragraph (1) [amending this section] shall apply as if included in section 1501 of the Tax Reform Act of 1976 [section 1501 of Pub. L. 94–455] at the time of the enactment of such Act [Oct. 4, 1976].”

Pub. L. 95–600, title VII, § 703(j)(13), Nov. 6, 1978, 92 Stat. 2942, provided that: “Notwithstanding section 1904(d) of the Tax Reform Act of 1976 [Pub. L. 94–455, set out as an Effective Date of 1976 Amendment note under section 4041 of this title], the amendment made by section 1904(a)(22)(A) of such Act [amending this section] shall take effect on the date of the enactment of such Act [Oct. 4, 1976].”

Effective Date of 1976 Amendment

Amendment by section 1501(b)(8) of Pub. L. 94–455 applicable to taxable years beginning after Dec. 31, 1976, see section 1501(d) of Pub. L. 94–455, set out as a note under section 62 of this title.

Amendment by section 1904(a)(22) of Pub. L. 94–455 effective on first day of first month which begins more than 90 days after Oct. 4, 1976, see section 1904(d) of Pub. L. 94–455, set out as a note under section 4041 of this title.

Effective Date

Pub. L. 93–406, title II, § 2002(i)(2), Sept. 2, 1974, 88 Stat. 971, provided that: “The amendments made by subsections (d) through (h) except subsection (g)(5) and (6) [enacting this section and sections 4974 and 6693 of this title and amending sections 37, 46, 50, 56, 72, 801, 805, 901, 3401, and 6047 of this title] shall take effect on January 1, 1975.”

Plan Amendments Not Required Until January 1, 1994

For provisions directing that if any amendments made by subtitle B [§§ 521–523] of title V of Pub. L. 102–318 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, 1994, see section 523 of Pub. L. 102–318, set out as a note under section 401 of this title.

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 [§§ 1101–1147 and 1171–1177] or title XVIII [§§ 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.