Employer contributions, including matching and profit-sharing contributions, must be made by the company’s tax filing deadline, including extensions, to be tax-deductible and compliant with IRS regulations.
Key Deadlines for Employer Contributions
- Standard Deadline: Contributions are due by the company’s federal tax filing deadline (typically March 15 for S-corporations and partnerships or April 15 for C-corporations and sole proprietorships).
- Extended Deadline: If the company files a tax extension, contributions may be made by the extended tax deadline (typically September 15 or October 15, depending on the business type).
Why Timely Contributions Matter
- Tax Deductibility: Employer contributions must be made on time to qualify for a tax deduction in the applicable year.
- Nondiscrimination Testing: Late employer contributions could impact top-heavy and nondiscrimination testing Annual Deferral Percentage (ADP), Annual Contribution Percentage (ACP), and employer contribution tests).
- Plan Administration: Delayed employer contributions may cause operational errors, requiring corrections or penalties.
To avoid compliance risks, employers should ensure timely contributions and confirm deadlines with their tax advisor or recordkeeper.