Partnership SIMPLE plan due dates

[LCP]

Two partners/no employees and they have a SIMPLE.... when are the 1)deferral and the 2) match contributions due? I am getting conflicting info...

Some say 1)1/31 and 2)due date of return w/ extensions. Others say due date for all.

[Unregistered]

Just a wag

I couldn't find anything in Pub 590, but did see that individual IRA contribtutions are due by due date of return. My thinking is that SIMPLE contributions are essentially contributions to an employee's IRA, same rule applies.

Warning: If you want to p**s people off, play with their money. Once these folks have employees I recommend making both the deferral and the match within 30 days. If not, the employee is losing significant growth potential of their money.

JoshInNC

[Bees Knees]

Some say 1)1/31 and 2)due date of return w/ extensions. Others say due date for all.

The answer to your question is.......
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...there is no answer. No code section, regulation, or other published ruling on this subject has ever directly addressed the issue. People who claim it should be 1/31 have mistaken a poor Tax Court Summary Opinion (which by law can not be cited as precedent) as answering this question, when in fact, the case was about whether or not a SEP contribution was deductible.

We had a discussion about this in an earlier thread. Do a search on SIMPLE and you will find the thread.

[Matt Sova]

Deferrals

The due date of employee deferrals are by the 30th of the month following the month the deferrals were withheld. So October withholdings are due Nov 30.

The match is due by the due date of the return including extensions.

[Bees Knees]

The question has to do with the self employed partner. What are the due dates for a partner's elective deferrals? There is no question that the employer matching amounts are due by the due date of the return, including extensions.

[veritas]

Per HD Vest

Following a recent tax court case, the IRS has clarified their position on sole proprietors and partners who are making contributions to SIMPLE IRA plans. Owners of unincorporated businesses are expected to contribute salary deferral amounts to SIMPLE IRAs before January 30 of the following year. That means, for unincorporated business owners wishing to contribute on their own behalf for 2006, the salary deferral must be in a SIMPLE IRA account by January 30, 2007.

In addition, the IRS expects a written salary deferral election to be on file from these individuals. The easiest way to accomplish this is to have the business owner fill out and keep on file the Model Salary Deferral election from the 5304-SIMPLE or an equivalent form provided by the mutual fund family where the SIMPLE plan is held.

Employer contributions (2% non-elective or 3% match) may still be made up through the business’ tax filing deadline

[sea-tax]

Hey Veritas what do ya know Vest can actually be helpful once and awhile. I bet if you call the support line they will tell ya something different though.

[Brad Imsdahl]

That is definitely the position IRS is taking on their website.

http://www.irs.gov/retirement/article/0,,id=111420,00.html#30

It will be interesting, however, to see if they update Pub 560 as well. The example in their 2005 version says it is the tax return due date, including extensions.