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Bri

Schedule SB with the extended minimum deadline

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So if the minimum funding deadline's been bumped to 1/1/2021 instead of 9/15/2020, how would Schedule SB be prepared for a client who makes their deposit in November?  Show $0 made on the 5500 due 10/15 and simply amend the filing when the date's confirmed?

(Or are we expecting any sort of ruling providing an extension on just the SB part of the 5500 filing, perhaps?)

--bri

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Absent clarification I'm assuming you file with a funding deficiency on the 2019 SB since the funding was not made by 9/15/2020. Then you would apply the November payment first to the deficiency  when filing the 2020 SB.

 

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I agree.  That seems to be the building consensus of practitioners on other boards as well. 

That would also mean it should not be considered part of the assets as of 1/1/20.  Therefore deferring past the original due date would increase the amount of the 2020 MRC and potentially increase the 2020 PBGC premium.  Hopefully, we will have more guidance before the actual payments are due.

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On 6/17/2020 at 9:50 AM, Lou S. said:

Absent clarification I'm assuming you file with a funding deficiency on the 2019 SB since the funding was not made by 9/15/2020. Then you would apply the November payment first to the deficiency  when filing the 2020 SB.

 

 

The key advice now is to WAIT for guidance from IRS on this.   Extend your filing deadline (from July 31 to October 15), if this is not done automatically by IRS announcement in June or July.     With funding deadlines later than October 15, 2020, IRS  has to give some relief in the deadline for filing 2019 Schedule SB   to at least  1/1/2021  (if not the end of January 2021).   It would be crazy for IRS to do nothing, forcing us to show "Unpaid Contributions" as of the filing deadline that are actually not due until later.

 

For any plans that do file a 2019 Schedule SB before the extended Funding Deadline, showing an Unpaid Contribution ,  I think they should be filing an AMENDED  2019 Schedule SB after the minimum funding has been completed before the extended  1/1/2021 deadline.   The 2020 Schedule SB should not be showing any  Unpaid (2019) Contribution if the 2019 contributions were timely deposited before 1/1/2021.

 

....   Jeff

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17 hours ago, Jeff Hartmann said:

It would be crazy for IRS to do nothing, forcing us to show "Unpaid Contributions" as of the filing deadline that are actually not due until later.

I agree. I don't see how the 10-15 deadline isn't extended.

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18 hours ago, Jeff Hartmann said:

For any plans that do file a 2019 Schedule SB before the extended Funding Deadline, showing an Unpaid Contribution ,  I think they should be filing an AMENDED  2019 Schedule SB after the minimum funding has been completed before the extended  1/1/2021 deadline.   The 2020 Schedule SB should not be showing any  Unpaid (2019) Contribution if the 2019 contributions were timely deposited before 1/1/2021.

I'm not sure. The weird thing about this extension is that the amount due is increased using the effective interest rate not for the plan year to which the payment applies, but for the plan year which contains the payment date. If you make the contribution after the regular due date but before the end of 2020, then you will need to know the 2020 effective interest rate in order to apply it to 2019 minimum funding. However the 2020 EIR would not appear anywhere on the 2019 schedule SB. Not that you couldn't describe it in an attachment, but it just seems funny to me. For that reason I think it might be better shown on the 2020 schedule SB.

For now I am thinking of this extension as more of a waiver of the sec. 4971 excise tax and PBGC reporting obligations, which helps me feel better about potentially showing a funding deficiency. I agree that we should wait for more guidance on this, to the extent possible. Presumably the filing deadlines have already passed for some plans which are taking advantage of this extension - how have they handled it?

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DO we think that the pension contributions made after 9/15 but before 1/1/2020 will be deductible for the 2019 year? I haven't seen anything yet indicating this to be the case Or will those contributions need to be posted on the 2020 return but be used to satisfy the 2019 minmum?

 

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