Profit Sharing contribution deposited after the tax return due date

[Guest Tammy2006]

The employer took the deduction on their corporate tax return, the 5500 reported the employer contribution but the accountant forgot to actually fund the money. Can they pay a penalty and deposit the funds now?

Thanks!

[ERISAnut]

They may have to refile their tax return and 5500's to reflect that fact that the funds were not deposited by the tax filing deadline (including extensions).

[Guest mjb]

Q1 what is the plan year?

Q2 what is the tax yr of the employer?

Q3 if contribution is for 2005 employer tax yr, did employer file extension by date due for filing return?

Q4 what type of plan were contributons for: ps, matching?

[Guest Tammy2006]

Q1 what is the plan year?

2004

Q2 what is the tax yr of the employer?

2004

Q3 if contribution is for 2005 employer tax yr, did employer file extension by date due for filing return?

the contributions are for 2004 plan year, they are late anyway, with our without corporate extension.

Q4 what type of plan were contributons for: ps, matching?

PS contributions

While preparing the 2005 valuation, we discovered that 2004 has not been deposited

[Guest mjb]

There is no tax penalty for failure to make ps contributions but no deduction either. Accountant needs to file amended tax return & 5500. Dont know if there is a PT on account of extension of credit by plan to employer. If employer was not under any obligation to make contribution (it was a purely discretionary contribution) PT may be avoided.

Q what is er going to do now- make 04 contribution for 06 tax yr?

[Guest Tammy2006]

There is no tax penalty for failure to make ps contributions but no deduction either. Accountant needs to file amended tax return & 5500. Dont know if there is a PT on account of extension of credit by plan to employer. If employer was not under any obligation to make contribution (it was a purely discretionary contribution) PT may be avoided.

Q what is er going to do now- make 04 contribution for 06 tax yr?

the er would actually like to deposit now the 04 contrib and don't change the 5500 and the corporate return...I guess that's not an option now

[Guest mjb]

He can deposit it now but is not deductible for 2004. He will have a discrepancy on his 04 return for the duration of the s/l period which could be until 2011 if the return is not amended.

[Archimage]

You might want to review your plan document. Some docs have the language written in that the contribution is to be funded by the due date of the tax return. If so, you have an operational failure as well.