SHNEC deposit for 2017 plan year not made until now

Plan sponsor has not made their safe harbor non-elective contribution deposit for the 2017 Plan Year. It is my understanding that they have until 12/31/18 to make the deposit and keep the safe harbor status for 2017. Is that correct?  (I’m not sure if they deducted it on their 2017 tax return, but it would not have been deductible since it was not made by their 2017 tax filing deadline.)  

Question 1:  Is it deductible for 2018?

Question 2:  Do we have to apply lost earnings?

I would say that it must be made by 12/31/2018.  Doesn't appear to be deductible for the 2017 year since it is likely past the tax filing deadline (including extensions).  I would also say "no" to lost earnings as the contribution is being made within the 12 month period.

Good Luck!

 

They are also annual additions for 415 purposes for 2018 as well, I think.

this is the area (415 issues) the IRS agents (at least at one ASPPA Conference) concluded made no sense.

supposedly you would count the 2017 contribution toward the 2018 415 limit because it was made after 10/15. But if you wait until 2019 to make the contribution (corrective contribution for 2017 under EPCRS) then it counts toward the 2017 415 limit. And of course, if someone quit in 2017, they are due the safe harbor, but would have no comp in 2018, so no 415 limit, which means no contribution!

so the 'rules' for 415 limit make no sense in regards to this area.

1 hour ago, Tom Poje said:

this is the area (415 issues) the IRS agents (at least at one ASPPA Conference) concluded made no sense.

supposedly you would count the 2017 contribution toward the 2018 415 limit because it was made after 10/15. But if you wait until 2019 to make the contribution (corrective contribution for 2017 under EPCRS) then it counts toward the 2017 415 limit. And of course, if someone quit in 2017, they are due the safe harbor, but would have no comp in 2018, so no 415 limit, which means no contribution!

so the 'rules' for 415 limit make no sense in regards to this area.

There is an 'erroneous failure' provision within the 415 Regulations that you could argue to open the window between October 15th and December 31st for having them treated as annual additions for 2017.  If it were actually required by the plan and not made, how would that not be an erroneous failure?

I just don't see a situation where a 'no contribution' to a participant would be preferable over simply making the deposit and moving on.

Good Luck!

Thanks everyone!