Plan sponsors located in the federally designated disaster areas listed in IR 2011-87 will have until October 31, 2011, to file their forms, according to an alert from law firm Eisner Amper. The extension applies to Forms 5500 that had a due date for filing after August 26, 2011, and before October 31, 2011. The special extensions also apply to filers located outside the designated disaster areas that were unable to obtain the information necessary for filing from service providers, banks, or insurance companies whose operations were directly affected by the hurricane.
Because the tax relief granted by the IRS includes an extension of time to file business and individual tax returns, plan sponsors will be able to take a tax deduction for contributions made to their plans for the prior period if the contributions are deposited by the new extended due date of the return and provided they have met the other requirements of Internal Revenue Code (IRC) Section 404(a), the law firm noted.
However, sponsors of plans that are subject to the minimum funding provisions of IRC Section 412 – such as defined benefit plans, cash balance plans, and money purchase pension plans – are still required to fund these plans within 8½ months after the plan’s year end, as the IRS has not granted additional time to meet the minimum funding requirements under IRC section 412. For calendar year plans, this means that contributions will still need to be made by September 15, 2011, to meet the minimum funding requirements.
Plan sponsors – or those with necessary records, as noted further above – located in designated counties in Connecticut, Massachusetts, New Jersey, New York, North Carolina, Vermont, and Puerto Rico will receive the extension of time to file. The IRS may announce additional relief for taxpayers in other areas as damage assessments continue and encourages plan sponsors and tax practitioners to monitor Tax Relief in Disaster Situations for updates.
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