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Still time for a 2020 Retirement Plan Thumbnail

Still time for a 2020 Retirement Plan

Retirement Funding Taxes Small & Medium-sized Business

Employers can still establish a retirement plan for 2020. Historically, plans had to be established by year-end. 2020 is the first plan year where a Profit Sharing or Defined Benefit/Cash Balance Plan can be established until an employer’s tax filing deadline including extensions. This allows employers time to review their actual 2020 financials with their advisor & tax counsel before deciding if a new retirement plan is appropriate.

Funding deadlines still follow employer tax filing deadlines including extensions; however, DB/Cash Balance must be funded by 9/15. While 401(k) deferrals aren’t allowed retroactively, they can be included for the 2021 plan year moving forward. This law change was a result of the SECURE Act, which you can learn more about by viewing a SECURE Act Overview from our friends at Nicholas Pension Consultants.

Download our Quick Guide to Small Business Retirement Plans

Feel free to contact me with any questions regarding establishing plans for 2020.