Common use of Excess Contribution Penalty Tax Clause in Contracts

Excess Contribution Penalty Tax. If you contribute more to your Xxxx XXX than you are eligible to contribute, you have created an excess contribution, which is subject to a 6 percent excise tax. The excise tax applies each year that the excess contribution remains in your Xxxx XXX. If you timely file your federal income tax return, you may still remove your excess contribution, plus attributable earnings, as late as October 15 for calendar year filers.

Excess Contribution Penalty Tax. If you contribute more to your Xxxx XXX than you are eligible to contribute, you have created an excess contribution, which is subject to a 6 percent excise tax. The excise tax applies each year that the excess contribution remains in your Xxxx XXX. If you timely file your federal income tax return, you may still remove your excess contribution, plus attributable earnings, as late as October 15 for calendar year filers.