4093 / What excise taxes and additional taxes apply to tax sheltered annuity contributions and distributions?
Excess Contributions to Custodial Accounts
Contributions to a custodial account for the purchase of regulated investment company stock and to a retirement income account to the extent funded through custodial accounts are subject to a tax of 6 percent, not to exceed 6 percent of the value of the account, on (1) the amount by which the contributions other than a permissible rollover contribution ( Q 4007) exceed the lesser of the amount excludable from gross income under IRC Section 403(b) or the overall limitation under IRC Section 415, or whichever is applicable if only one is applicable, plus (2) any such excess carried over from the preceding tax year ( Q 4053).1
Early or Premature Distributions
If a taxpayer receives a premature distribution from a tax sheltered annuity, he or she will be subject to an excise tax equal to 10 percent of the portion of the distribution includable in income ( Q 4074).2
Minimum Required Distribution Failure