Deadline for Defined Benefit Plan Contributions Is Extended
The IRS announced it will treat a contribution to a single-employer defined benefit pension plan that has a due date of January 1, 2021, as timely if it is made no later than January 4, 2021.
The CARES Act extended defined benefit plan contributions to January 1, 2021 to allow employers to defer the payment obligations to calendar year 2021. Financial institutions can’t transfer funds on January 1, 2021 so the IRS has extended the deadline to the first business day, January 4.
The minimum required contribution made by January 4, 2021 (and the amount that may be added to the plan’s prefunding balance on account of any excess contribution) is determined by computing the related interest adjustments using the actual contribution date.
The deadline is also extended to January 4, 2021 for a plan sponsor’s election to add to a prefunding balance or to use a prefunding balance to offset a minimum required contribution for a plan year to which the CARES Act contribution extension applies.
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