Common use of NOTIFICATION OF DISALLOWED ELECTIVE Clause in Contracts

NOTIFICATION OF DISALLOWED ELECTIVE. DEFERRALS The Employer shall notify each affected Participant, within 2 1/2 months after the end of the Plan Year to which the disallowed Elective Deferrals relate, that the deferrals are no longer considered SARSEP contributions. Such notification shall specify the amount of the disallowed Elective Deferrals and the Participant's calendar year in which they are includible in income. Additionally, the notice must provide an explanation of the applicable penalties if the disallowed Elective Deferrals are not withdrawn in a timely fashion. The notice to each affected Participant shall state the following: (a) The amount of the disallowed Elective Deferral; (b) That the disallowed Elective Deferrals are includible in the Participant's gross income for the calendar year or years in which the amounts deferred would have been received by the Participant in cash had she or he not made the election to defer, and that the income allocable to such disallowed Elective Deferrals is includible in the Participant's gross income in the year withdrawn from the SEP-IRA; xxd (c) That the Participant must withdraw the disallowed Elective Deferrals and allocable income from the SEP-IRA xx the April 15 following the calendar year of notification by the Employer. Disallowed Elective Deferrals not withdrawn by the April 15 following the calendar year of notification will be subject to the IRA xxxtribution limitations of Code Section 219 and Section 408 and may be considered excess contributions to the Participant's IRA. Xxsallowed Elective Deferrals may be subject to the six percent tax on excess contributions under Code Section 4973. If income allocable to a disallowed Elective Deferral is not withdrawn by April 15 following the year of notification by the Employer, the income may be subject to the ten percent tax on early distributions under Code Section 72(t) when withdrawn. 4.7 REPORTING Disallowed Elective Deferrals are reported for tax purposes in the same manner as excess SEP contributions.

NOTIFICATION OF DISALLOWED ELECTIVE. DEFERRALS The Employer shall notify each affected Participant, within 2 1/2 months after the end of the Plan Year to which the disallowed Elective Deferrals relate, that the deferrals are no longer considered SARSEP contributions. Such notification shall specify the amount of the disallowed Elective Deferrals and the Participant's calendar year in which they are includible in income. Additionally, the notice must provide an explanation of the applicable penalties if the disallowed Elective Deferrals are not withdrawn in a timely fashion. The notice to each affected Participant shall state the following: (a) The amount of the disallowed Elective Deferral; (b) That the disallowed Elective Deferrals are includible in the Participant's gross income for the calendar year or years in which the amounts deferred would have been received by the Participant in cash had she or he not made the election to defer, and that the income allocable to such disallowed Elective Deferrals is includible in the Participant's gross income in the year withdrawn from the SEP-IRA; xxd and (c) That the Participant must withdraw the disallowed disalloxxx Elective Deferrals and allocable income from the SEP-IRA xx by the April 15 following the calendar year of notification by the xxx Employer. Disallowed Elective Deferrals not withdrawn by the April 15 following the calendar year of notification will be subject to the IRA xxxtribution contribution limitations of Code Section 219 and Section 408 and may anx xay be considered excess contributions to the Participant's IRA. Xxsallowed Disallowed Elective Deferrals may be subject to the six percent percexx tax on excess contributions under Code Section 4973. If income allocable to a disallowed Elective Deferral is not withdrawn by April 15 following the year of notification by the Employer, the income may be subject to the ten percent tax on early distributions under Code Section 72(t) when withdrawn. 4.7 REPORTING Disallowed Elective Deferrals are reported for tax purposes in the same manner as excess SEP contributions.