Guest hpaine Posted March 26, 2003 Posted March 26, 2003 Sorry for the basic question, but when does an annual P/S contribution have to be made to a 401(k) plan? The resources that I've found say that it has to be posted by the due date of the company's corporate tax filing, usually 3/15 for a calendar year plan. Any other cites would be appreciated!
david rigby Posted March 26, 2003 Posted March 26, 2003 Very possible that this has been discussed previously. This might answer your question. http://benefitslink.com/boards/index.php?showtopic=16347 Alternatively, try the search feature. I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.
Guest hpaine Posted March 26, 2003 Posted March 26, 2003 PAX, thanks for the information. I did try the search option, however, either my computer was acting up or didn't use correct search words.
Brian Gallagher Posted March 28, 2003 Posted March 28, 2003 i clicked on the link and all it did was open a new browser with a page of all of the current boards! :-( Remember: two wrongs don't make a right, but three rights make a left.
Fredman Posted March 28, 2003 Posted March 28, 2003 here's another try at pax's link... http://benefitslink.com/boards/index.php?a...ST&f=20&t=16347
R. Butler Posted March 28, 2003 Posted March 28, 2003 Employer contributions must be made by the due date of the employer's federal tax return, including all valid extensions. See1.404(a)-1( c ).
Mike Preston Posted March 28, 2003 Posted March 28, 2003 R. Butler, that is only if you wish to deduct the contributions retroactively per 404(a)(6). If you don't, then you get an additional 30 days before the contribution is considered an annual addition in the current (not prior) year.
R. Butler Posted March 28, 2003 Posted March 28, 2003 Agreed. I just automatically assumed employer was making a contribution for 2002, in 2003, but wanted to deduct in 2002. We all know what "assume" means.
Guest Bubby Posted September 10, 2003 Posted September 10, 2003 R. Butler & Mike Preston: Can you give me a cite for allowing contributions for a plan year more than 8 1/2 months after the end of the PY? Thanks!
Brian Gallagher Posted September 10, 2003 Posted September 10, 2003 I thought that the P/S money just had to be segregated from the company's general assets by the tax filing date, but not necessarily allocated to the participant accounts. In other words, the check has to be cut and entered into the accounting ledger so in thoery, the company doesn't have access to that money any more. Am I way off base? Remember: two wrongs don't make a right, but three rights make a left.
Guest jashendo Posted September 12, 2003 Posted September 12, 2003 Bubby -- Allowing contributions for what purpose? If you mean for purposes of deductibility for the prior year, the contribution would ahve to comply with 404(a)(6) and the regs thereunder -- the deadline would be the extended due date for the employer's return for the year in question. That may or may not be more than 8-1/2 months after PYE. What is the 8-1/2 months in your question? Are you thinking of the deadline under 412©(10), for purposes of the minimum funding standards? (that's the only 8-1/2 month deadline that I know of) If so, that deadline is a DB plan rule -- not applicable here.
Guest Bubby Posted September 16, 2003 Posted September 16, 2003 The contribution is a discretionary employer contribution in a profit sharing plan. The 8 1/2 months is the due date of their tax filing for 2002, on extension. So the question is: Now that we are past 9/15 and the client has filed their 2002 tax return, can they still make a PS contribution for 2002? The answer, from the responses so far, seems to be, "Yes, but they have to deduct it on their 2003 tax return." So the next question is: When, if ever, is the absolute drop dead deadline for contributions to a PS plan for a given PY? Is it the 5500 due date (on extension), is it something else, or is there no absolute deadline? In other words, could you make a contribution for 1999 today as long as you deduct it on your 2003 tax return, don't run afoul of 415, and are willing to restate all your 5500's from 1999 to the present?
ljr Posted September 16, 2003 Posted September 16, 2003 See regulation section 1.415-6(b)(7) which relates to crediting annual additions to a plan for a plan year. The deadline for taking a tax deduction is by the filing/extended filing date. However, if they contribute within 30 days after the due date of their tax return, the contribution can be allocated to participants even though it would not be deductible for that year. We had this come up and were able to allocate the money but referred the client to their CPA as to what to do about the deduction.
Guest Bubby Posted September 17, 2003 Posted September 17, 2003 Thanks! I believe that cite was what I was looking for to address my client's question.
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