Common use of Restrictions on Withdrawal Clause in Contracts

Restrictions on Withdrawal. Your employees may not withdraw or transfer from their SEP-▇▇▇ any SEP contributions (or income on these contributions) attributable to elective deferrals made during a particular plan year until 2 1/2 months after the end of that plan year. If you choose to do so before this 2 1/2 month period has expired, however, you may notify your employees when the deferral percentage limitation test has been completed for a particular plan year and that this withdrawal restriction is thus no longer applicable. In general, any transfer or distribution made before expiration of the applicable 2 1/2 month period (or notification, if sooner) will be includible in the employee's gross income and may also be subject to a ten percent penalty tax for early withdrawal. This restriction does not apply to an employee's excess elective deferrals.

Restrictions on Withdrawal. Your employees may not withdraw or transfer from their SEP-▇▇▇ SEP-IRA any SEP contributions (or income ▇▇come on these contributions) attributable to elective deferrals made during a particular plan year until 2 1/2 months after the end of that plan year. If you choose to do so before this 2 1/2 month period has expired, however, you may notify your employees when the deferral percentage limitation test has been completed for a particular plan year and that this withdrawal restriction is thus no longer applicable. In general, any transfer or distribution made before expiration of the applicable 2 1/2 month period (or notification, if sooner) will be includible in the employee's gross income and may also be subject to a ten percent penalty tax for early withdrawal. This restriction does not apply to an employee's excess elective deferrals.