form and manner as the Secretary may provide) the qualified salary reduction arrangement of the employer at any time during the year. (B) Proration and application of qualified plan limitation In the case of a year during which an employer terminates a qualified salary reduction arrangement before the end of such year— (i) the applicable dollar amount determined under paragraph (2)(E) for such year and the applicable dollar amount determined under section 414(v)(2)(B)(ii) for such year shall both be prorated to the date of such termination, (ii) for purposes of determining the compensation of an employee for such arrangement for such year, the year of such termination shall be treated as ending on the date of such termination, and (iii) subparagraph (D) of paragraph (2) shall not apply with respect to a qualified plan maintained in such year only after the date of such termination. (C) Matching contribution Termination of an arrangement under subparagraph (A) shall not be construed to modify the requirement of subparagraph (A)(iii) (with respect to any elective employer contributions) or (B) (with respect to nonelective contributions) of paragraph (2) made by the employer on behalf of an employee during the portion of such year the qualified salary reduction arrangement is in effect. . (b) Effective date The amendments made by this section shall apply to years beginning after the date of the enactment of this Act. 4. Elimination of higher penalty on early SIMPLE IRA distributions (a) In general Section 72(t) of the Internal Revenue Code of 1986 is amended by striking paragraph (6). (b) Effective date The amendment made by this section shall apply to distributions in taxable years beginning after the date of the enactment of this Act. 5. Increase in contributions allowed for SIMPLE IRA (a) Additional nonelective employer contributions allowed (1) In general Section 408(p)(2)(A) of the Internal Revenue Code of 1986 is amended by striking and at the end of clause (iii), by redesignating clause (iv) as clause (v),