Deduction Timing

[Andy the Actuary]

The following was from the 2009 EA meeting. The gist was that a contribution could not be deducted for a (tax) year earlier than the (Plan) year for which contribution was claimed on schedule SB. Does anyone have an update or confirmation on this?

Contribution Deduction Timing

•Can employer claim prior year tax deduction for grace-period contributions reported on current year’s Schedule SB (tax year = plan year)?

-Some authority for claiming deduction

•Regs. §1.404o(a)-14(d)(2)(ii) and §11.412©-12

•Rev. Rul. 77-82

•PLRs/TAMs 7945115, 8210014 (TAM 200604040 revoked for contributions for hours worked in current tax year), 8714008

-Current IRS ruling position apparently ties deduction to reporting on prior year Schedule B/SB

•Rev. Rul. 76-28 (plan must treat contribution as if actually received on last day of employer’s tax year)

•PLRs/TAMs 199935062, 200311036, 200523033, 200526022–How to apply when tax year ≠plan year?la