(8) Arrangement not disqualified if excess contributions distributed (A) In general A cash or deferred arrangement shall not be treated as failing to meet the requirements of clause (ii) of paragraph (3)(A) for any plan year if, before the close of the following plan year— (i) the amount of the excess contributions for such plan year (and any income allocable to such contributions through the end of such year) is distributed, or (ii) to the extent provided in regulations, the employee elects to treat the amount of the excess contributions as an amount distributed to the employee and then contributed by the employee to the plan. Any distribution of excess contributions (and income) may be made without regard to any other provision of law. (B) Excess contributions For purposes of subparagraph (A), the term “excess contributions” means, with respect to any plan year, the excess of— (i) the aggregate amount of employer contributions actually paid over to the trust on behalf of highly compensated employees for such plan year, over (ii) the maximum amount of such contributions permitted under the limitations of clause (ii) of paragraph (3)(A) (determined by reducing contributions made on behalf of highly compensated employees in order of the actual deferral percentages beginning with the highest of such percentages). (C) Method of distributing excess contributions Any distribution of the excess contributions for any plan year shall be made to highly compensated employees on the basis of the amount of contributions by, or on behalf of, each of such employees. (D) Additional tax under section 72(t) not to apply No tax shall be imposed under section 72(t) on any amount required to be distributed under this paragraph. (E) Treatment of matching contributions forfeited by reason of excess deferral or contribution or permissible withdrawal For purposes of paragraph (2)(C), a matching contribution (within the meaning of subsection (m)) shall not be treated as forfeitable merely because such contribution is forfeitable if the contribution to which the matching contribution relates is treated as an excess contribution under subparagraph (B), an excess deferral under section 402(g)(2)(A), a permissible withdrawal under section 414(w), or an excess aggregate contribution under section 401(m)(6)(B). (F) Cross reference For excise tax on certain excess contributions, see section 4979.
26 USC § 401(k)(8)
None identified, default scope is assumed to be the parent (subpart A) of this section.