Matching Contribution Due Date

[Guest dyoder]

What is the due date for making matching contributions to a non-safe harbor 401(k) plan? I always thought it was the same as the profit sharing plan due date (tax return due date plus extensions) but have now received information that it is 12 months after the end of the plan year (even if plan is not a safe harbor plan). Can someone please clarify this for me. Thanks.

[Tom Poje]

see 1.401(m)-2(a)(4)(iii) to be used in the ACP test must be made within 12 months.

otherwise, despite you would 'match' deferrals you would now have to treat the match as a nonelective - as the only nonelective and run an a(4) test. (which, since after 9 1/2 months woule be too late to correct with a corrective amendment if you failed - you would have to go through CAP or whatever.

If my wee brain still functions, I believe it also becomes a 415 allocation for that year, not the plan year made.

[E as in ERISA]

May depend on what purpose you're talking about. In order to get the deduction for the earlier year, you need to make it by the due date of the return. If you're matching 2005 contributions for calendar year company and plan then you need to make by due date of the 2005 return in order to get a deduction for tax year 2005. Otherwise you deduct it in 2006.

[Bob R]

And, I believe that if it is a for-profit business and the contribution is made more than 30 days after the due date of the tax return, then it is annual addition under 415 for the year of the contribution, not the year to which it relates.

It's safe to say that you generally want to make the contribution by the due date of the tax return.