Retroactive CB plan set up for 2022

[Bob Demontigny]

Hypothetical : 2022 retroactive CB plan to be set up.  Potential sponsor already filed 2022 corp return but will amend for reasons other than this but wants to include if possible.  In CA we have an automatic extension for all counties due to weather except 2 (client located in county under extension).  We have time to file 5558 still.  Rev Rule 66-144; 1966-1 C.B 91 seems to support this:

"Section 404(a)(6) of the Code provides that a contribution for a taxable year made by a taxpayer reporting on the accrual basis shall be deemed to be made within such taxable year if paid within the time prescribed for filing its return plus any extension of time in which to file. Therefore, a contribution paid within an extended filing period is deemed to have been made during the taxable year. Thus, a contribution made during such extended period, as provided for under section 6081(b) of the Code, is deemed to have been made during the taxable year regardless of when the return is filed."

Guess the question is does the filing of the 2022 corp return trump the automatic extension granted for CA thru 10/16/23?

Thanks for any input.

 

[CuseFan]

I don't think the filing per se precludes adopting a plan retroactively. For example, say the 2022 return is due 9/15/2023 but was filed on 7/1 - I think the taxpayer could decide to adopt a plan retroactively and amend their return before 9/15.

I think the issue for you is whether the automatic weather related extension counts the same as a filed extension for this purpose - I would say probably but don't know that - and when the original return was actually filed. If filed before the un-extended due date, I think might render the automatic extension moot, that's my understanding how filed extensions are treated. If they filed after the un-extended due date under the automatic extension then you might have a case for adopting retroactive plan now and filing amended return.

That is my non-legal, non-accountant opinion for what it's worth.

[cpc0506]

We have been told by our internal ERISA Legal department that if the corporate tax return was already filed, you could not amend that return to allow for the adoption of a plan for the prior year.  I would like to hear others take on this.