Employer contributions (contributions that are not salary reduction contributions), generally can be deposited any time up to the employer’s tax filing due date (including extensions). For tax-exempt employers, the deadline for employer contributions is 4½ months after the end of the employer’s tax year.
For calendar year employers, this date is May 15. This coincides with the employer’s Form 990, if applicable. IRS regulations have effectively extended the time by which employers must make contributions to the fifteenth day of the tenth month following the end of the applicable year end.
This gives employers sufficient time to complete required nondiscrimination testing, coverage and participation testing and other tax related tasks before making the contribution to the plan. However, under ERISA, employers are required to follow the terms of the plan document. If the plan document includes a specific contribution date or deadline, then contributions must be made by that date notwithstanding the later date permitted under IRS regulations.
Editor’s Note: This is an occasional feature in the NTSA Advisor. It is drawn from The Source, a book that covers technical, compliance, administrative and marketing aspects of the 403(b) and 457(b) markets. More information about The Source is available here.
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