The IRS today released an advance version of Notice 2020-82 announcing a contribution to a single-employer defined benefit pension plan with an extended due date of January 1, 2021, will be treated as timely if it is made no later than January 4, 2021 (which is the first business day after January 1, 2021).
Read Notice 2020-82 [PDF 20 KB]
A provision of the “Coronavirus Aid, Relief, and Economic Security Act” (CARES Act) (Pub. L. No. 116-136) provides that any minimum required contribution that would otherwise be due under section 430(j) during calendar year 2020 is due on January 1, 2021.
The IRS in August 2020 issued Notice 2020-61 as guidance regarding the extension of time for single-employer defined benefit plan contributions under the CARES Act provision. Read TaxNewsFlash
Today’s notice notes that the purpose of the extended due date for contributions to January 1, 2021, is to allow employers sponsoring these plans to defer these payment obligations until calendar year 2021, but as further noted, financial institutions cannot transfer funds on the January 1, 2021 due date and thus employers would need to make these contributions prior to January 1, 2021 (which would be inconsistent with the legislative intent to defer the payment obligation until calendar year 2021).
Notice 2020-82 therefore provides that:
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.