(A), or (ii) taken into account in computing the investment in the contract for purposes of section 72. (2) Special rule for IRAs (A) In general In the case of an applicable retirement plan which is an individual retirement plan (other than a simplified employee pension under section 408(k) or a simple retirement account under section 408(p)), any applicable annual addition to such plan in excess of the limitation under subsection (a) shall be treated for purposes of sections 408 and 408A as a contribution for the taxable year in excess of the maximum amount allowable as a deduction under section 219 for the taxable year. (B) After tax contributions In the case of applicable annual additions in excess of the limitation under subsection (a)— (i) rules similar to the rules of paragraph (1)(B) shall apply to any such additions which are treated as designated nondeductible contributions under section 408(o), and (ii) section 408A(d)(2)(C) shall apply to any such additions which are to a Roth IRA (and to any net income allocable to such additions). For purposes of clause (ii), distributions from a Roth IRA shall be treated as first made from amounts described in clause (ii) and section 408A(d)(2)(C) shall be applied in the same manner as if there were a distribution of a contribution described in section 408(d)(4) (without regard to whether such distribution is timely made). (3) Allocation of excess applicable annual additions If the applicable dollar amount for a taxable year exceeds the amount described in subsection (a)(2), the taxpayer may, in such form and manner as the Secretary may prescribe, allocate such excess to applicable annual additions to each applicable retirement plan in such manner as the taxpayer chooses. (c) Definitions and special rules For purposes of this section— (1) Applicable annual addition (A) In general The term applicable annual addition means any of the following made to or on behalf of an individual: (i) An annual addition (within the meaning of section 415(c)(2)). (ii) Any