DB Deduction

[SKC]

Company deposits 250K during 2020 to their DB Plan.  This is below the maximum deductible amount.   Can they deduct 150K in 2020 and save the remaining 100K deposited and deduct in 2021?

 

Thank you.

[shERPA]

I don't think so.  General rule of 404, contributions are deductible in the year made. 

[Effen]

No, deductions don't carry over like that.  They can be deducted in the fiscal year deposited, or the preceding fiscal year if deposited before the due date of the tax return, but they can't be deducted in a subsequent fiscal year. 

There might be exceptions if the deposit exceeded the maximum deductible amount, but I am not sure.

[Luke Bailey]

On 3/23/2021 at 8:59 PM, Effen said:

There might be exceptions if the deposit exceeded the maximum deductible amount

And then you'd have a 10% excise tax under IRC sec. 4972.

[Mike Preston]

Which can be eliminated by making an election under 4972 c.