deadline for making top heavy contribution to DC plan

[k man]

Plan is determined to be top heavy for 2003 plan year. When must an employer make the top heavy contribution (please include authority)?

[Belgarath]

Date tax return is due (plus extensions). IRC 404(a)(6). There's no special deadline just because it is top heavy - deadline for a top heavy contribution is same as deadline for a regular employer contribution.

[Mike Preston]

Technically, there is no specific deadline I'm aware of. To be deductible, I agree, though, that the contribution must be made by the due date of the tax return. However, if there are no deductibility issues you then have until 30 days after due date of tax return, at least. If you go beyond 30 days then you have a potential 415 issue. Best to avoid the 415 issue and the deductibility issues, though, and get the money in by the due date of the tax return.

[k man]

our office seems to think the deadline is 12 months from the last day of the plan year for which the plan is determined to be top heavy. frankly i cant find either this deadline or the other one you mention in the code.

[mbozek]

There is no statutory deadline which requires a contribution to a DC plan other than a MP type plan for which contributons must be made no later than 8 1/2 months after the end of the plan year under IRC 412. The 12 month requirement is for claiming the contribution as an allocation under 401(k). The failure to make the contribution by 30 days after the date for filing the return results in the contribution not being allocated for the plan year. The 404(a)(6) deadline is for claiming a tax deduction for the prior tax year. The failure to make the contribution by the date for filing the tax return only prevents the er from claiming a tax deducton for the prior year but the er can claim the tax deduction for year the TH contribution is made. This question is no different the the question of when the er must make a discretionary contribution to a PS plan.

[Guest philc]

In order to correct a top heavy contribution that wasn't made do you calculate the earnings adjustment from the time the top heavy contribution should have been made in order for it to have been deductible for the year the minimum was required?

For example, top heavy for the 2003 plan year (fiscal year the same) based on 12-31-02 determination date. No T-H contribution made in 2004. Now want to make it. Are earnings calculated from 3-15-04 (normal time for 2003 deduction) to the time the T-H contribution is made? If they filed for an extension for 2003 so they have until 9-15-04, could the earnings be calculated from that date?