952 31 USC 1037.
26 USC 4940.
PUBLIC LAW 93-406-SEPT. 2, 1974
[88 STAT.
SEC. 1052. AUTHORIZATION OF APPROPRIATIONS. There is authorized to be appropriated to the Department of the Treasury for the purpose of carrying out all functions of the OiRce of Employee Plans and Exempt "Organizations for each fiscal year beginning after June 30, 1974, an amount equal to the sum of— (1) so much of the collections from the taxes imposed under section 4940 of such Code (relating to excise tax based on investment income) as would have been collected if the rate of tax under such section was 2 percent during the second preceding fiscal year, and (2) the greater of— (A) an amount equal to the amount described in paragraph (1), or (B) $30,000,000.
Subtitle B—Other Amendments to the Internal Revenue Code Relating to Retirement Plans SEC. 2001. CONTRIBUTIONS ON BEHALF OF SELF-EMPLOYED INDIVIDUALS AND SHAREHOLDER-EMPLOYEES. (a) INCREASE I N MAXIMUM EMPLOYED INDIVIDUALS.— 26 USC 404.
FOR
SELF-
INCREASE
IN
MAXIMUM
AMOUNT
DEDUCTIBLE FOR SHARE-
HOLDER-EMPLOYEES.—Paragraph (1) of section 1379(b) (relating to taxability of shareholder-employees) is amended— CI) by striking Out "10 percent" in subparagraph (A) and inserting in lieu thereof "15 percent", and (2) by striking out "$2,500" in subparagraph (B) and inserting in lieu thereof "$7,500". (c)
26 USC 401.
DEDUCTIBLE
(1) Paragraph (1) of section 404(e) (relating to special limitations for self-employed individuals) is amended— (A) by striking out "$2,500, or 10 percent" and inserting in lieu thereof "$7,500, or 15 percent", and (B) by striking out "subject to the provisions of paragraph (2) " and inserting in lieu thereof "subject to paragraphs (2) and (4)". (2) Paragraph (2)(A) of section 404(e) is amended by striking out "shall not exceed $2,500, or 10 percent" and inserting in lieu thereof "shall (subject to paragraph (4)) not exceed $7,500, or 15 percent". (3) Section 404(e) is amended by adding at the end thereof the following new paragraph: "(4) LIMITATIONS CANNOT BE LOWER THAN $750 OR 100 PERCENT OF EARNED INCOME.—The limitations under paragraphs (1) and (2)(A) for any employee shall not be less than the lesser of— " (A) $750,or " (B) 100 percent of the earned income derived by such employee from the trades or businesses taken into account for purposes of paragraph (1) or (2)(A) as the case may be.". (b)
26 USC 1379.
AMOUNT
ONLY FIRST $100,000 of A N N U A L COMPENSATION To B E TAKEN
INTO ACCOUNT.—Subsection (a) of section 401 (relating to requirements for qualification) is amended by inserting after paragraph (16) the following new paragraph: "(17) I n the case of a plan which provides contributions or benefits for employees some or all of whom are employees within the meaning of subsection (c)(1), or are shareholder-employees within the meaning of section 1379(d), only if the annual com pen-
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