The federal government announced on March 17th that individual taxpayers have a 3 month reprieve to pay 2019 income taxes, up to $1 million in taxes owed. This extension to pay taxes also covers pass-through entities (e.g. LLCs) and small businesses.
There are significant IRS and Department of Labor deadlines coming up for most retirement plans. The IRS has yet to extended any deadlines, so it’s important that companies and entrepreneurs who sponsor a retirement plan continue trying to meet them.
If you need assistance in meeting these deadlines, my company, Leading Retirement Solutions, provides compliance and government reporting to company sponsored retirement plans across the country (e.g. SEP/Simple IRA, 401k, 403b, Defined Benefit Plans and more).
Question: The IRS filing deadline for most 401k Plans (and other plan types) is July 31st, 2020, will the IRS extend this filing deadline?
Answer: The IRS has not extended the deadline although we are hoping they will in the near future. The American Retirement Association submitted a proposal to the IRS on 3/16/2020 requesting an automatic extension of IRS Form 5500, applicable to most 401k Plans, to October 15, 2020. If granted the automatic extension of time to file IRS Form 5500 would apply to all retirement plans with a December 31 plan year end (corresponding extensions for fiscal year ends were also requested).
Question: My business has ceased operations, temporarily, what should I do with my company retirement plan?
Answer: Generally, if employees (including yourself) are not being paid compensation, there is nothing to contribute to the retirement plan. It is important that you immediately let your 401(k) Plan provider(s) know that you have temporarily ceased operations so that they can detail any compliance or operational requirements that you need to be aware of, depending on your retirement plan requirements.
Question: If our retirement plan failed an ADP or ACP discrimination test, has the IRS extended the March 15th deadline for correction of the failed test(s)?
Answer: March 15th was a major deadline for correction of failed ADP/ACP tests for 401(k)s and other retirement plans. A failed test generally requires a return of excess contributions to certain participants and/or additional contributions made to the plan by the company. The IRS has not yet extended the period for correcting a failed ADP/ACP test. At this point, you need to promptly correct a failed test (you should have received notice from your retirement plan provider if your plan has a failed test).
Leading Retirement Solutions Update: Our Leading Retirement Solutions Team wishes everyone health and safety. We have maintained a brick and mortar as well as a strong remote workforce for 10+ years and it was a smooth transition to go fully remote a few weeks ago. All of our team members are healthy and operating in secure environments from home offices. We continue to operate normal business hours (Mon.-Fri.; 5am PT-6pm PT) and our team is readily available to support you, your clients, answer phone calls and respond to emails.
