Quarterly Contributions

[Guest D450]

Have a calendar year plan required to make quarterlies. We estimated 4/15 contribution of $50,000, based on 100% of EOY min funding requirements for prior plan year. We've finished calculations for the current year; minimum quarterly turns out to be $45,000. Is it correct that the 7/15 contribution will be $45,000 and that I will not be able to use the extra $5,000 paid on 4/15 to reduce any quarterly (not until 9/15/09 contribution)? I seem to recall hearing something to this effect, but I can't find anything now to substantiate it. This plan has no COB or PFB.

Thanks.

[Effen]

I believe 2008 is a "good faith" year so there may be an opportunity to have the ER re-designate $5K of the 1st payment to be used to partially satisify the 2nd quarterly. That assumes he "designated" the $50K as his first quarterly. If they just deposited it, without any particular designation, I would just have them do it now.

I don't know if or how you can change a designation in 2009, but I'm hoping that by the time 2009 comes around, we will know.

[Guest Dan Moore]

In my opinion, you can apply the extra $5,000 to the 7/15/08 quarterly requirement. What you can't do (based on my understanding of 1.430(j)-1 is apply any interest (for 3 months) on the $5,000.

What I've heard about designating is that you must specify pretty much in advance what year the contribution is for, which would not present a problem in this case.