12/30 Plan year-end to 12/31 Plan year-end?

[Guest gkaley]

In 1997, we amended the plan year end to a fiscal year-end 12/30 (from 12/31) to take advantage of the double tax deduction on employer contributions. (We are currently in Chapter 11 reog.).

Now, after 3 years of administrative headaches and chronic fatigue, we would like to amend back to a calendar year end plan.

Aside from having to create a 1-day plan year (12/30 to 12/31), what other pitfalls and issue should we consider before moving forward with the amendment?

[wmyer]

Because you changed your plan year less than four years ago, I believe that you are not automatically approved for a plan year change and will probably have to file a Form 5308.

[Guest gkaley]

Thanks.

Let's assume I receive approval. Are there any tax implications against past employer contribution deductions?

[Guest benefitgal]

Note: Form 5308 does not need to be completed by profit sharing/401 (k) plans (among others). However if your plan is one which is subject to section 412 (funding requirements) then you will need to file a Form 5308.

[Wessex]

A profit sharing plan, among other types, does not have to file a Form 5308 to change its plan year. A Form 5308 would be required, however, to change the trust year unless the trust qualifies for automatic approval. As pointed out above, one of the requirements for automatic approval is that no change in plan year have been made for any of the preceding four plan years.