Profit Sharing Contribution deadline - nonprofit orgs

[Renafesq]

What's the deadline for making a profit sharing plan contribution for a calendar year plan for a nonprofit org? Is it the same as for profits?

[Belgarath]

I assume you mean for 415 purposes, as there is no deduction?

As per Treasury Regulation 1.415©-1(b)(6), there is a deadline for employer contributions for those contributions to be considered “allocated” for a given limitation year. For tax-exempt entities, there is a special deadline, which is no later than the 15th day of the 10th calendar month following the end of the calendar or fiscal year in which the particular limitation year ends. Assuming they are on a calendar fiscal/limitation year, this means that any contribution after October 15th of 2016, would have to be treated, for 415 purposes, as being allocated in whatever limitation year actually contributed.

[Renafesq]

Thank you! I was asking for purposes of Form 5500 filing. The client was advised they had until the end of the PY (which is the calendar year), to make contributions and still include those contribution on the form 5500 filing. Thanks for the info...I'm still a newbie!

[GMK]

jireh87 - Welcome.

The best suggestion I can give you is that you read practically everything that's posted on BenefitsLink (except maybe not when they get into deep details about something about which you have no need or interest to know).

This site has a boat load of experts who provide a wealth of useful, documented information.

[david rigby]

... and some (like myself) who may provide a wealth of non-useful information.

[Renafesq]

Thank you all!

[Renafesq]

One add'l follow-up. The client's TPA disagrees and says this:

The only Employer contribution that is relevant in terms of a deadline is the safe harbor contribution that is stated in the plan. The safe harbor contribution is a Non-Elective Safe Harbor and the timing of when a safe harbor contribution has to be made can be found in income tax regulation 1.401(k)-2(a)(4)(i)(A). Our reading of this section is that safe harbor contribution made prior to 12/31/2016, can be applied to 2015.

Doesn't that reg the TPA referenced related to the ADP test?

[Belgarath]

Well, let's back up for a moment. Your original post specified a "profit sharing" contribution. Are we really talking about a "profit sharing" contribution, or a safe harbor nonelective contribution?

[Renafesq]

I apologize for that. The client wasn't very clear at first. But I believe the question is regarding both: I need to know what the deadline is for a nonprofit to pay in 2015 safe harbor and profit sharing contributions to a plan? Is it the ultimate filing deadline (10/1716) or the end of the next calendar year (12/31/16).

[Belgarath]

If it is truly a "profit sharing" contribution, then it is as discussed previously. If it is a safe harbor nonelective, then I agree with the TPA - the initial reference is actually 1.401(k)-3(h)(1). If you read this, it will refer you back to 1.401(k)(2), and you will find you end up, for purposes of this question, with the deadline referenced under the section cited by the TPA.

If you have both, then you have two separate deadlines - one for each piece.

[Renafesq]

It appears that there is both so I agree with that...but now the tpa is saying that in this case since this is a non- profit and the profit sharing is completely discretionary, it can also be paid by 12/31. Not sure where she's getting this and since this is a new area for me, I'm not totally sure why it matters that the profit sharing is completely discretionary.

[Belgarath]

Actually, I was in a bit of a hurry, and I think I gave you bad information on the safe harbor piece. The deadline for the safe harbor piece is indeed 12/31/2016, to preserve the safe harbor status of the plan. However, for 415 purposes, since made after the 415 deadline discussed earlier, it is ALLOCATED for 2016, same as the profit sharing. Still only one deadline for 415 purposes. There are some limited exceptions to the otherwise applicable 415 deadlines, but this isn't one of them.

Prior to the 2007 415 regulations, I seem to recall that the 12/31 deadline was used for 415 purposes as well (which frankly made sense) but the final 415 regulations didn't provides this carve out.

Sorry about that.