EXCEPTIONS TO EXCISE TAX ON NONDEDUCTIBLE CONTRIBUTIONS.

SEC. 755. EXCEPTIONS TO EXCISE TAX ON NONDEDUCTIBLE CONTRIBUTIONS. (a) In General.—Section 4972(c) is amended by adding at the end the following new paragraph: “(6) Exceptions.— In determining the amount of nondeductible contributions for any taxable year, there shall not be taken into account— 108 STAT. 5024 “(A) contributions that would be deductible under section 404(a)(1)(D) if the plan had more than 100 participants if— “(i) the plan is covered under section 4021 of the Employee Retirement Income Security Act of 1974, and “(ii) the plan is terminated under section 4041(b) of such Act on or before the last day of the taxable year, and “(B) contributions to 1 or more defined contribution plans which are not deductible when contributed solely because of section 404(a)(7), but only to the extent such contributions do not exceed 6 percent of compensation (within the meaning of section 404(a)) paid or accrued (during the taxable year for which the contributions were made) to beneficiaries under the plans. If 1 or more defined benefit plans were taken into account in determining the amount allowable as a deduction under section 404 for contributions to any defined contribution plan, subparagraph (B) shall apply only if such defined benefit plans are described in section 404(a)(1)(D). For purposes of subparagraph (B), the deductible limits under section 404(a)(7) shall first be applied to amounts contributed to a defined benefit plan and then to amounts described in subparagraph (B).” (b) Effective Date.— (1) Section 4972(c)(6)(A).—Section 4972(c)(6)(A) of the Internal Revenue Code of 1986 (as added by this section) shall apply to taxable years ending on or after the date of enactment of this Act. (2) Section 4972(c)(6)(B).—Section 4972(c)(6)(B) of such Code (as added by this section) shall apply to taxable years ending on or after December 31, 1992.