Employer Match Timing

[Guest koo]

When must an employer match be deposited to the Plan? The Plan operates on a calendar year (January 1st to December 31st) and the fiscal year is October 1st to September. For instance, if it was 2004, the plan year is January 1, 2004 to December 31, 2004 and the 2004 fiscal year is October 1, 2005 to September 30, 2005. I know if the both plans operate on a calendar year, the employer contributions are due 30 days after the form 1120 (taking into accoutn all extensions).

But, what about in the case when the employer and plan operate on different years? When would the employer contribitions be due?

[Guest Sieve]

The deadline you mention--30 days after the due date, as extended, for filing the federal income tax return--is the deadline for contributions to be considered for purposes of IRC Section 415 (annual additions) for the plan year with respect to which the contributions were made. For deduction purposes, however, the deadline is the due date, as extended, for filing the income tax return.

When the years don't match, the deduction is generally taken for the taxable year IN WHICH the plan year ends, if the contribution is made by the due date, as extended, for that taxable year. So, for a taxable year ending on 9/30/2005, a contribution allocated for the plan year ending 12/31/2004 (i.e., the plan year ending within the taxable year) could be made, potentially, as late as 6/15/2006 (i.e., the due date, as extended, for the taxable year in which the plan year ends)--and for IRC Section 415 purposes, the contribution could be made as late 7/15/2006 (but, in that case, the contribution would be too late to be deductible for the taxable year ending 9/30/2005).