Can I still set up a profit sharing plan for 2020?

[Jakyasar]

A CPA approached me. He has a client with Ida extension till end of 2021.

Can they still set up a profit sharing plan for 2020 as tax filing has been extended?

Thank you

[Peter Gulia]

Internal Revenue Code of 1986 (26 U.S.C.) § 401(b)(2) provides:

If an employer adopts a stock bonus, pension, profit-sharing, or annuity plan after the close of a taxable year but before the time prescribed by law for filing the return of the employer for the taxable year (including extensions thereof), the employer may elect to treat the plan as having been adopted as of the last day of the taxable year.

http://uscode.house.gov/view.xhtml?req=(title:26%20section:401%20edition:prelim)%20OR%20(granuleid:USC-prelim-title26-section401)&f=treesort&edition=prelim&num=0&jumpTo=true