Did you know you have until the tax extension filing deadline to fund your 401k or other employer plans? You can even file your return before funding the plan. However, the funds must be in the account by the extension deadline. 

The IRS revisited discussions in regards to how timing rules for IRC sections 404(a)(6) and 415 are stipulated for employers establishing new 401(k) plans after the end of the tax year.

The updated Issue Snapshot included details and rules on employers establishing retirement plans, and how contributions and deductions are applied. For complete details, please see Deductibility of employer contributions to a 401(k) plan made after the end of the tax year.

How Does Benefit Business Taxation?

Per IRS rules, a business can now contribute to their 401k up until the 6-month extension deadline.

Moreover, if a business filed their return, and claimed the deduction on the return, they still have until the extension deadline to fund it. 

Sources

¹ https://www.irs.gov/retirement-plans/issue-snapshot-deductibility-of-employer-contributions-to-a-401k-plan-made-after-the-end-of-the-tax-year