deduction timing

[gregburst]

Calendar year 401k/profit sharing plan is sponsored by a corporation which files an extension for its tax return; so Sep 15 is the tax return due date. But the company files its tax return on Jul 31. Does it still have until Sep 15 to make a deductible contribution for the prior year?

IRC 404a6 and Rev Rul 66-144 suggest yes. But several CPAs have told me no.

[Doghouse]

Sal Tripodi agrees with you.

[gregburst]

Glad to know. I sure couldn't find it in the EOB though.

[Doghouse]

It's lurking in Chapter 7 Part E, #2 (before 2.a.).

[mbozek]

Its complicated. If employer files tax return before March 15 it cannot file an extension on March 15 to extend the time to make the contribution to Sept 15. If the employer files an extension to file the tax return by March 15 the contribution can be made by Sept 15 regardless of when the tax return is filed.