How long after a plan year ends can a contribution be made and still b

[John A]

If an employer wants to make a profit sharing contribution and allocate it as of 12/31/00, by when must that contribution be made strictly for allocation purposes? I realize the year of deduction and the year the amount is treated as an annual addition have rules laid out, and may cause contributions that are allocated in one year to be treated as annual additions and/or deducted in a different year. But I do not know of any rules restricting allocation dates. Could a contribution made on 12/31/01 be allocated as of 12/31/00? How about a contribution made on 1/15/02? Any cites?

Thanks for any input.

[IRC401]

There is no limit on retroactive allocations. The money could be deposited 10 years from now and allocated as of 12/31/00, BUT you need to avoid 415 problems. The 415 regulations govern to what limitation year an allocation relates. If you make a contribution in 2002 and allocate itas of 12/31/00, every single employee whose account receives an allocation needs to have 415 compensation for the 2002 limitation year. If any employee quits prior to the limitation year of the contribution, you have a 415 problem.

PS: Don't forget about the definitely determinable rules, the 401(a)(4) rules, recordkeeping and administration issues, and 5500 reporting.