Is postmark date sufficient for deposit "due date"?

[AlbanyConsultant]

It seems to be about three years since this topic has come up, so I was just wondering what everyone's current opinion is regarding making the deposit of employer contributions timely.

 

Obviously, we'd prefer if the money was actually deposited into the Trust by the deadline date.  But we all have clients who, for one reason or another, aren't ready to make the deposit until the day before the deadline and still have to mail a check somewhere.  What's the best current guidance we can give those poor souls?

 

From searching previous threads here, I've found:

1. There’s a footnote to the 1996 DOL deposit regulations (the regulations that relate to the definition of “Plan Assets”) that gives an example of an employer mailing a check to the plan counting as the money being segregated as of the day the check is mailed (provided that the check clears).  This example relates to employee deferrals and doesn’t mention employer contributions.
2. IRC 7502 gives general guidelines about using the postmark date, but it explicitly says that this section does not apply if you’re making the deposit to “any court other than the Tax Court”.
3. There are apparently several Private Letter Rulings that use the mailing date as the deposit date for their various scenarios.  There is at least one instance, however, where the postmark date was rejected because the employer couldn’t prove what was in the envelope they postmarked.

 

Some of these threads are over a decade old, so I'm hoping that someone has gotten a clearer answer by now.  Thanks.

[david rigby]

I'm not aware of any changes.  My understanding is the "postmark rule" still applies, providing you remember that means a USPS postmark, not a mark from your office postal meter.

 

[MoJo]

53 minutes ago, david rigby said:

I'm not aware of any changes.  My understanding is the "postmark rule" still applies, providing you remember that means a USPS postmark, not a mark from your office postal meter.

 

While I agree this is "still" the rule, I had to deal with a client that mailed a check to Vanguard ON PAY DAY, and the DOL still hit them up for a delay in segregating assets - arguing the company (a 160 employee HVAC contractor) could have used electronic means to ensure DELIVERY within 3 days.

Still shaking my head, but....

[jpod]

I understood the question to relate to the timing on depositing employer contributions for deduction purposes, not the DOL rules for participant contributions and loan repayments.

[MoJo]

1 hour ago, jpod said:

I understood the question to relate to the timing on depositing employer contributions for deduction purposes, not the DOL rules for participant contributions and loan repayments.

Yes, but....  His research (first point) references the regs on "segregation" and his questions references the "deadline" - of which there actually is none for "depositing."  That is a fiduciary issue.  Hence, my comment relating to the DOL's treatment - in at least one case - of the postmark issue (and if it ain't segregated, it can't be deposited)..