If an applicable retirement plan includes a qualified Roth contribution program-
For purposes of this section-
The term "qualified Roth contribution program" means a program under which an employee may elect to make, or to have made on the employee's behalf, designated Roth contributions in lieu of all or a portion of elective deferrals the employee is otherwise eligible to make, or of matching contributions or nonelective contributions which may otherwise be made on the employee's behalf, under the applicable retirement plan.
A program shall not be treated as a qualified Roth contribution program unless the applicable retirement plan-
For purposes of this section-
The term "designated Roth contribution" means any elective deferral, matching contribution, or nonelective contribution which-
The amount of elective deferrals which an employee may designate under paragraph (1) shall not exceed the excess (if any) of-
A rollover contribution of any payment or distribution from a designated Roth account which is otherwise allowable under this chapter may be made only if the contribution is to-
Any rollover contribution to a designated Roth account under subparagraph (A) shall not be taken into account for purposes of paragraph (1).
Notwithstanding sections 402(c), 403(b)(8), and 457(e)(16), in the case of any distribution to which this paragraph applies-
Any election under clause (iii) for any distributions during a taxable year may not be changed after the due date for such taxable year.
In the case of an applicable retirement plan which includes a qualified Roth contribution program, this paragraph shall apply to a distribution from such plan other than from a designated Roth account which is contributed in a qualified rollover contribution (within the meaning of section 408A(e)) to the designated Roth account maintained under such plan for the benefit of the individual to whom the distribution is made.
Any distribution to which this paragraph applies shall not be taken into account for purposes of paragraph (1).
The rules of subparagraphs (D), (E), and (F) of section 408A(d)(3) (as in effect for taxable years beginning after 2009) shall apply for purposes of this paragraph.
In the case of an applicable retirement plan which includes a qualified Roth contribution program-
For purposes of this title-
Any qualified distribution from a designated Roth account shall not be includible in gross income.
For purposes of this subsection-
The term "qualified distribution" has the meaning given such term by section 408A(d)(2)(A) (without regard to clause (iv) thereof).
A payment or distribution from a designated Roth account shall not be treated as a qualified distribution if such payment or distribution is made within the 5-taxable-year period beginning with the earlier of-
The term "qualified distribution" shall not include any distribution of any excess deferral under section 402(g)(2) or any excess contribution under section 401(k)(8), and any income on the excess deferral or contribution.
Notwithstanding section 72, if any excess deferral under section 402(g)(2) attributable to a designated Roth contribution is not distributed on or before the 1st April 15 following the close of the taxable year in which such excess deferral is made, the amount of such excess deferral shall-
Section 72 shall be applied separately with respect to distributions and payments from a designated Roth account and other distributions and payments from the plan.
Notwithstanding sections 403(b)(10) and 457(d)(2), the following provisions shall not apply to any designated Roth account:
An applicable retirement plan-
For purposes of this subsection, the term "eligible participant", with regard to a defined contribution plan, means an individual, without regard to whether the individual is otherwise a participant in such plan, who-
Notwithstanding subparagraph (A)(ii), an individual on whose behalf a pension-linked emergency savings account is established who thereafter becomes a highly compensated employee (as so defined) may not make further contributions to such account, but retains the right to withdraw any account balance of such account in accordance with paragraphs (7) and (8).
Subject to subparagraph (B), no contribution shall be accepted to a pension-linked emergency savings account to the extent such contribution would cause the portion of the account balance attributable to participant contributions to exceed the lesser of-
In the case of contributions made in taxable years beginning after December 31, 2024, the Secretary shall adjust the amount under clause (i) at the same time and in the same manner as the adjustment made under section 415(d), except that the base period shall be the calendar quarter beginning July 1, 2023. Any increase under the preceding sentence which is not a multiple of $100 shall be rounded to the next lowest multiple of $100.
To the extent any contribution to the pension-linked emergency savings account of a participant for a taxable year would exceed the limitation of subparagraph (A)-
For purposes of this section-
An automatic contribution arrangement described in this paragraph is an arrangement under which an eligible participant is treated as having elected to have the plan sponsor make elective contributions to a pension-linked emergency savings account at a participant contribution rate that is not more than 3 percent of the compensation of the eligible participant, unless the eligible participant, at any time (subject to such reasonable advance notice as is required by the plan administrator), affirmatively elects to-
For purposes of an automatic contribution arrangement described in subparagraph (A), the plan sponsor-
With respect to a defined contribution plan which includes a pension-linked emergency savings account, the administrator of the plan shall, not less than 30 days and not more than 90 days prior to the date of the first contribution to the pension-linked emergency savings account, including any contribution under an automatic contribution arrangement described in section 801(d)(2) of the Employee Retirement Income Security Act of 1974, or the date of any adjustment to the participant contribution rate under section 801(d)(2)(B)(ii) of such Act, and not less than annually thereafter, shall furnish to the participant a notice describing-
A notice furnished to a participant under subparagraph (A) shall be-
The required notices under subparagraph (A) may be included with any other notice under the Employee Retirement Income Security Act of 1974, including under section 404(c)(5)(B) or 514(e)(3) of such Act, or under section 401(k)(13)(E) or 414(w)(4), if such other notice is provided to the participant at the time required for such notice.
If an employer makes any matching contributions to a defined contribution plan of which a pension-linked emergency savings account is part, subject to the limitations of paragraph (3), the employer shall make matching contributions on behalf of an eligible participant on account of the participant's contributions to the pension-linked emergency savings account at the same rate as any other matching contribution on account of an elective contribution by such participant. The matching contributions shall be made to the participant's account under the defined contribution plan which is not the pension-linked emergency savings account. Such matching contributions on account of contributions to the pension-linked emergency savings account shall not exceed the maximum account balance under paragraph (3)(A) for such plan year.
For purposes of any applicable limitation on matching contributions, any matching contributions made under the plan shall be treated first as attributable to the elective deferrals of the participant other than contributions to a pension-linked emergency savings account.
For purposes of subparagraph (A), the term "matching contribution" has the meaning given such term in section 401(m)(4).
A pension-linked emergency savings account shall allow for withdrawal by the participant on whose behalf the account is established of the account balance, in whole or in part at the discretion of the participant, at least once per calendar month and for distribution of such withdrawal to the participant as soon as practicable after the date on which the participant elects to make such withdrawal.
Any distribution from a pension-linked emergency savings account in accordance with subparagraph (A)-
Upon termination of employment of the participant, or termination by the plan sponsor of the pension-linked emergency savings account, the pension-linked emergency savings account of such participant in a defined contribution plan shall-
No amounts shall be transferred by the participant from another account of the participant under any plan of the employer into the pension-linked emergency savings account of the participant.
Subparagraph (F) of section 408A(d)(3) shall not apply (including by reason of subsection (c)(4)(D) of this section) to any rollover contribution of amounts in a pension-linked emergency savings account under subparagraph (A).
If any excess deferrals are distributed under section 402(g)(2)(A) to a participant, such amounts shall be distributed first from any pension-linked emergency savings account of the participant to the extent contributions were made to such account for the taxable year.
Except as provided in subparagraph (B), a distribution from a pension-linked emergency savings account shall not be treated as an eligible rollover distribution for purposes of sections 401(a)(31), 402(f), and 3405.
In the case of termination of employment of the participant, or termination by the plan sponsor of the pension-linked emergency savings account, except for purposes of 401(a)(31)(B), a distribution from a pension-linked emergency savings account which is contributed as provided in paragraph (8)(A)(i) shall be treated as an eligible rollover distribution.
Notwithstanding section 411(d)(6), a plan which includes a pension-linked emergency savings account may cease to offer such accounts at any time.
A plan of which a pension-linked emergency savings account is part-
The Secretary, in consultation with the Secretary of Labor, shall issue regulations or other guidance not later than 12 months after the date of the enactment of the SECURE 2.0 Act of 2022 with respect to the anti-abuse rules described in the preceding sentence.
For purposes of this section-
The term "applicable retirement plan" means-
The term "elective deferral" means-
The term "matching contribution" means-
but only if such contribution is nonforfeitable at the time received.
1 See References in Text note below.
26 U.S.C. § 402A
EDITORIAL NOTES
REFERENCES IN TEXTSection 403(b)(7)(A)(ii), referred to in subsec. (c)(4)(E)(iii), probably means section 403(b)(7)(A)(ii) of this title prior to amendment by Pub. L. 116-94, div. O, title I, §109(c)(2), Dec. 20, 2019, 133 Stat. 3151.The Employee Retirement Income Security Act of 1974, referred to in subsec. (e)(1)(A)(i), (5)(A), (C), is Pub. L. 93-406, Sept. 2, 1974, 88 Stat. 829. Sections 404, 514, and 801 of the Act are classifed to sections 1104, 1144, and 1193, respectively, of Title 29, Labor. For complete classification of this Act to the Code, see Short Title note set out under section 1001 of Title 29 and Tables.The date of the enactment of the SECURE 2.0 Act of 2022, referred to in subsec. (e)(12), is the date of enactment of div. T of Pub. L. 117-328, which was approved Dec. 29, 2022.
AMENDMENTS2022-Subsec. (a). Pub. L. 117-328, §604(a), added pars. (2) and (3) and redesignated former par. (2) as (4). Subsec. (b)(1). Pub. L. 117-328, §604(b), inserted ", or to have made on the employee's behalf," after "elect to make" and ", or of matching contributions or nonelective contributions which may otherwise be made on the employee's behalf," after "otherwise eligible to make". Subsec. (c)(1). Pub. L. 117-328, §604(c), inserted ", matching contribution, or nonelective contribution" after "elective deferral" in introductory provisions.Subsec. (d)(5). Pub. L. 117-328, §325(a), added par. (5).Subsec. (e). Pub. L. 117-328, §127(e)(1), added subsec. (e). Former subsec. (e) redesignated (f).Subsec. (f). Pub. L. 117-328, §127(e)(1), redesignated subsec. (e) as (f).Subsec. (f)(3). Pub. L. 117-328, §604(d), added par. (3). 2014-Subsec. (c)(4)(E)(iii). Pub. L. 113-295 substituted "403(b)(7)(A)(ii)" for "403(b)(7)(A)(i)". 2013-Subsec. (c)(4)(E). Pub. L. 112-240 added subpar. (E).2010-Subsec. (c)(4). Pub. L. 111-240, §2112(a), added par. (4).Subsec. (e)(1)(C). Pub. L. 111-240, §2111(a), added subpar. (C).Subsec. (e)(2). Pub. L. 111-240, §2111(b), amended par. (2) generally. Prior to amendment, text read as follows: "The term 'elective deferral' means any elective deferral described in subparagraph (A) or (C) of section 402(g)(3)."
STATUTORY NOTES AND RELATED SUBSIDIARIES
EFFECTIVE DATE OF 2022 AMENDMENT Amendment by section 127 of Pub. L. 117-328 applicable to plan years beginning after Dec. 31, 2023, see section 127(g) of Pub. L. 117-328, set out as a note under section 72 of this title. Pub. L. 117-328, div. T, title III, §325(b), Dec. 29, 2022, 136 Stat. 5359, provided that:"(1) IN GENERAL.-Except as provided in paragraph (2), the amendment made by this section [amending this section] shall apply to taxable years beginning after December 31, 2023."(2) SPECIAL RULE.-The amendment made by this section shall not apply to distributions which are required with respect to years beginning before January 1, 2024, but are permitted to be paid on or after such date." Pub. L. 117-328, div. T, title VI, §604(e), Dec. 29, 2022, 136 Stat. 5393, provided that: "The amendments made by this section [amending this section] shall apply to contributions made after the date of the enactment of this Act [Dec. 29, 2022]."
EFFECTIVE DATE OF 2013 AMENDMENT Pub. L. 112-240, §902(b), Jan. 2, 2013, 126 Stat. 2371, provided that: "The amendment made by this section [amending this section] shall apply to transfers after December 31, 2012, in taxable years ending after such date."
EFFECTIVE DATE OF 2010 AMENDMENT Pub. L. 111-240, §2111(c), Sept. 27, 2010, 124 Stat. 2566, provided that: "The amendments made by this section [amending this section] shall apply to taxable years beginning after December 31, 2010." Pub. L. 111-240, §2112(b), Sept. 27, 2010, 124 Stat. 2566, provided that: "The amendments made by this section [amending this section] shall apply to distributions after the date of the enactment of this Act [Sept. 27, 2010]."
EFFECTIVE DATESection applicable to taxable years beginning after Dec. 31, 2005, see section 617(f) of Pub. L. 107-16, set out as an Effective Date of 2001 Amendment note under section 402 of this title.
REGULATORY AUTHORITY Pub. L. 117-328, div. T, title I, §127(f), Dec. 29, 2022, 136 Stat. 5329, provided that: "The Secretary of Labor and the Secretary of the Treasury (or a delegate of either such Secretary) shall have authority to issue regulations or other guidance, and to coordinate in developing regulations or other guidance, to carry out the purposes of this Act [div. T of Pub. L. 117-328, see Tables for classification], including-"(1) adjustment of the limitation under section 801(d)(1) of the Employee Retirement Income Security Act of 1974 [29 U.S.C. 1193(d)(1)] and section 402A(e)(3) of the Internal Revenue Code of 1986, as added by this Act, to account for inflation;"(2) expansion of corrections programs, if necessary;"(3) model plan language and notices relating to pension-linked emergency savings accounts; and"(4) with regard to interactions with section 401(k)(13) of the Internal Revenue Code of 1986."
- Internal Revenue Code of 1986
- The term "Internal Revenue Code of 1986" means this title, and the term "Internal Revenue Code of 1939" means the Internal Revenue Code enacted February 10, 1939, as amended.
- Secretary of the Treasury
- The term "Secretary of the Treasury" means the Secretary of the Treasury, personally, and shall not include any delegate of his.
- Secretary
- The term "Secretary" means the Secretary of the Treasury or his delegate.
- student
- The term "student" means any individual-(i) who is temporarily present in the United States-(I) under subparagraph (F) or (M) of section 101(15) of the Immigration and Nationality Act, or(II) as a student under subparagraph (J) or (Q) of such section 101(15), and(ii) who substantially complies with the requirements for being so present.
- taxable year
- The term "taxable year" means the calendar year, or the fiscal year ending during such calendar year, upon the basis of which the taxable income is computed under subtitle A. "Taxable year" means, in the case of a return made for a fractional part of a year under the provisions of subtitle A or under regulations prescribed by the Secretary, the period for which such return is made.
- taxpayer
- The term "taxpayer" means any person subject to any internal revenue tax.