We look forward to talking with with you.
Contact us today!
(This article was adapted by permission from the original version written by Eric C. Droblyen, CPC, QPA of Employee Fiduciary).
With the passage of the 2020 Setting Every Community Up for Retirement Enhancement (SECURE) Act CPA’s and investment advisors have more flexibility to help business owners capitalize on important tax planning strategies in the same year they file their corporate tax return.
This legislation made significant retirement plan changes, including expanded deadlines for establishing a new retirement plan or amending a traditional 401k Plan into a safe harbor plan. For most small businesses, the new deadlines took effect January 1, 2020.
The expanded adoption dates for a new calendar-based plan are below:
Tax StatusFiling DeadlineExtended Deadline
| S-Corporation (or LLC taxed as S-Corp) | March 15 | September 15 |
| Partnership (or LLC taxed as a part) | March 15 | September 15 |
| C-Corporation (or LLC taxed as C-Corp) | April 15 | October 15 |
| Sole Proprietorship (or LLC taxed as sole prop) | April 15 | October 15 |
While this change would not give employees more time to make salary deferrals (401k), it would give employers more time to decide whether or not they want adopt a new DB, CB or 401(k) PS plan in order to make a year-end employer contribution.
Here are the 2020 and 2021 deadlines for calendar-based qualified plans.
2020 Plan Year
DateNew 401(k) PlanExisting 401(k) Plan
| October 1, 2020 | Deadline to adopt a safe harbor 401(k) plan for 2020. | |
| December 2, 2020 | Deadline to adopt the amendment necessary to convert a traditional 401(k) plan into a 3% nonelective safe harbor plan for 2020. | |
| March 15, 2021 | Deadline for S-Corps and partnerships (or LLCs taxed as either) to adopt a qualified plan for 2020 (assuming NO tax return extension is filed). | |
| April 15, 2021 | Deadline for C-Corps and sole proprietorships (or LLCs taxed as either). Assumes NO tax return extension is filed. | |
| September 15, 2021 | Deadline for S-Corps and partnerships (or LLCs taxed as either) to adopt a qualified plan for 2020 (assuming a tax return extension IS filed). | |
| October 15, 2021 | Deadline for C-Corps and sole proprietorships (or LLCs taxed as either) to adopt for 2020 (assuming a tax return extension IS filed). | |
| December 31, 2021 | Deadline to adopt the amendment necessary to convert a traditional 401(k) plan into a 4% nonelective safe harbor plan for 2020. |
2021 Plan Year
DateNew 401(k) PlanExisting 401(k) Plan
| November 2, 2020 | Deadline to notify SIMPLE IRA participants their plan will terminate December 31 in order to adopt a new 401(k) plan for 2021. | |
| December 2, 2020 | Deadline to notify plan participants that a traditional 401(k) plan will be converted to a match-based safe harbor plan for 2021. | |
| December 31, 2020 | Deadline to adopt the amendment necessary to convert a traditional 401(k) plan to a match-based safe harbor plan for 2021. | |
| October 1, 2021 | Deadline to adopt a safe harbor 401(k) plan for 2021. | |
| December 2, 2021 | Deadline to adopt the amendment necessary to convert a traditional 401(k) plan to a 3% nonelective safe harbor plan for 2021. | |
| March 15, 2022 | Deadline for S-Corps and partnerships (or LLCs taxed as either) to adopt a qualified plan for 2021 (assuming NO tax return extension is filed). | |
| April 15, 2022 | Deadline for C-Corps and sole proprietorships (or LLCs taxed as either) to adopt a qualified plan for 2021 (assuming NO tax return extension is filed). | |
| September 15, 2022 | Deadline for S-Corps and partnerships (or LLCs taxed as either) to adopt a qualified plan for 2021 (assuming a tax return extension IS filed). | |
| October 15, 2022 | Deadline for C-Corps and sole proprietorships (or LLCs taxed as either) to adopt a qualified plan for 2021 (assuming a tax return extension IS filed). | |
| December 31, 2022 | Deadline to adopt the amendment necessary to convert a traditional 401(k) plan into a 4% nonelective safe harbor plan for 2021. |
For more information, contact PlanPerfect to help you iron out your business’s specific deadlines and for any third party administration needs. Our friends over at Ferenczy Benefits Law Center, our ERISA attorney specialists, have also put together a very thorough and informative resource in the Journal of Pension Benefits. Head toward the middle of the article and you’ll find a handy graph on the key provisions and tax act changes.
