Common use of EXCISE TAXES AND PENALTIES Clause in Contracts

EXCISE TAXES AND PENALTIES. If the Employer fails to notify any of the affected Employees within 2 1/2 months following the end of the Plan Year of an excess SEP contribution, the Employer must pay a tax equal to 10% of the excess SEP contribution. If the Employer fails to notify employees by the end of the Plan Year following the Plan Year in which the excess SEP contributions arose, the SEP no longer will be considered to meet the requirements of Code Section 408(k)(6) and contributions in the Employee's IRA xxxl be subject to the IRA xxxtribution limitations and thus may be considered excess contributions to the Employee's IRA.