NEW DUE DATES FOR EMPLOYER CONTRIBUTIONS TO RETIREMENT PLANS FOR C CORPS AND PARTNERSHIPS, NO CHANGE ON WHEN EMPLOYEE COMPENSATION IS DEDUCTIBLE

 

If you’re a C corporation or partnership that sponsors a qualified pension, profit sharing, 401(k) plan or a Simplified Employee Pension Plan (SEP) or Savings Incentive Match Plan for Employees (SIMPLE) IRA plan, please note that the due date for making employer contributions to these plans has changed.

In order to be deductible for the 2016 taxable year, employer contributions for these plans for 2016 have to be made by the due date or extended due date of your 2016 tax return. Since certain tax return due dates have changed for tax years starting in 2016, the time limit for making retirement plan contributions has changed as well.

Here’s a summary for both C corporations and partnerships.

C corporations

The unextended due date for calendar year taxpayers has changed from March 15 to April 15 (April 18, 2017 for 2016). However, the extended due date has not changed and remains September 15 (a five-month extension).

If your taxable year ends on June 30, your unextended due date will be September 15, and your extended due date will be the following April 15 (a seven-month extension).

If your taxable year ends on any other date (other than June 30 or December 31), your unextended due date is the 15th day of the fourth month after the end of the taxable year. Your extended due date will be six months later.

These changes for C corporations are in effect through taxable years that begin in 2025 and are based on current Internal Revenue Code provisions. New changes will start in 2026.

Tax year endingUnextended due dateExtended due dateComments

December 31April 15 (April 18, 2017 for 2016 returns)Five-month extension: September 15*Extended due date remains unchanged

June 30September 15Seven-month extension: April 15 

Any other date15th day of the fourth month after the end of the taxable yearSix-month extension 

 * The IRS draft Form 7004 (the corporate extension form) says a six-month extension will be allowed. We are monitoring the situation.

Partnerships

Partnership returns will now be due one month earlier (March 15, 2017 versus April 18, 2017) or the 15th date of the third month after the end of the taxable year. Extensions will be for six months.

Tax year endingUnextended due dateExtended due date

December 31March 15Six-month extension: September 15

Any other date15th day of the third month after the end of the taxable yearSix-month extension;

Note on compensation

The change in tax return and retirement plan contribution due dates has no effect on tax deduction rules for compensation. If accrued employee compensation for a taxable year is paid more than 2 ½ months after the end of the employer’s taxable year, it will be considered deferred compensation, deductible in the year of payment (and not in the taxable year of accrual).