1.404(a)-14(e)(1) deductibility for 2 years of pension contributions in 1 taxable period

[CharlesLeggette]

Client missed their 3/15 deadline for MRC and contributed it last week…so now we’re square for 2015…but the client is having a terrific year and now wants to make the maximum 404(o) contribution for 2016…their plan is well funded, though not overfunded but by a little…calendar year plan…original effective date 2013….Cash Balance Plan…owner has 4 years under 415 but has an accrued Br of only about ½ that 415 max….I’ve attached Sal Tripodi’s piece on the issue…

1) Can they deduct the 404(o)max and 2015 MRC in 2016 as “includable contributions”.

2) Can he do 1 year pay credit to synch him up to 415 – he knows he’ll need to make larger contributions for staff, but is a very generous employer…

3) Any other ideas

[Lou S.]

1) - I believe they can take the greater of (MRC15 + MRC16) or Max404(o)16

2) - They can increase benefits for 2016, just be careful not to run into a "pattern of abusive amendments"