2021 401(k) deadlines for plan sponsors
If staying ahead of 401(k) deadlines feels like a full-time job, that’s because it actually is. The long list of reporting requirements, tax forms, deadlines and employee notices you need to consider might seem daunting. If you’re a small business owner, it might even dissuade you from offering a 401(k) plan in the first place. It shouldn’t, especially if you have help.
Below are some of the important deadlines that plan sponsors should be mindful of heading into the new year.
401(k) Plan Sponsor Deadlines for a January 1 to December 31 Plan Year
Your individual filing dates may be different if you have an off-calendar plan year, or if you file extensions for your business tax filings. Where you have questions always speak to your tax professional to ensure your tax filings are timely.
Table of Contents
January 15, 2021
Prior year census data due to your administrator
February 14, 2021
Quarterly participant statements for Q4 2020 due
March 15, 2021
ADP/ACP refunds of excess contributions are due to highly compensated employees to avoid the 10% excise tax
Employer contributions due for S Corporations, LLCs and Partnerships (for 2020 deduction, unless extended)
May 15, 2021
Quarterly participant statements for Q1 2021 due
August 14, 2021
Quarterly participant statements for Q2 2021 due
November 14, 2021
Quarterly participant statements for Q3 2021 due
Start of 401(k) Safe Harbor status for existing plans
January 1, 2021
Want to add Safe Harbor status to your existing 401(k) plan? Doing so comes with a slew of benefits, especially when it comes to managing compliance and discrimination testing. Here’s the thing: Safe Harbor status can only take effect for existing plans on January 1, so be sure to work with your administrator by the start of the previous year’s Q4 to get the ball rolling. Keep in mind that you’ll need to give your employees advance notice of the switch no later than December 1.
Form 1099-R must be distributed to participants who received a distribution
January 31, 2021
For tax purposes, there’s earned income, and then there’s retirement income. The Form 1099-R represents the latter. This form is due to plan participants who, in the preceding year, withdrew funds from a retirement plan, exceeded annual contribution limits, or transferred funds from one account to another.
While plan administrators won’t have to file the Form 1099-R with the IRS for another month (see below), they’ll need to provide either a paper or electronic version to those participants no later than January 31. That should be easy to remember, since Forms W-2 and 1099-MISC are due to employees and contractors on the same day.
Quarterly Statement must be provided to participants
February 14, 2021
May 15, 2021
August 14, 2021
November 14, 2021
All participants in the plan must get statements at least quarterly. February 14, 2021 is the deadline to provide Q4 statements for 2020. For all quarters in 2021, the statements are due 45 days after quarter end.
Form 1099-R must be filed with the IRS
February 28, 2021 (hardcopy)
March 31, 2021 (electronic copy)
By now, you’ve provided the participants who received a distribution in 2020 with a copy of the Form 1099-R. As covered above, this is the form that details an individual’s withdrawals from a retirement or profit-sharing plan. While you’ve given these to employees, plan administrators also need to file copies of these forms with the IRS. If you’re sending a physical copy, the deadline is February 28, 2021. If you’re filing electronically you’ll have until the end of March to do so.
Corrective distributions are due to employees
March 15, 2021
June 30, 2021 (EACA plans only)
When your plan doesn’t have Safe Harbor status, it’s subject to discrimination testing. The testing looks at what you’ve contributed to both rank-and-file and highly compensated employee (“HCE”) accounts.
When there’s a notable discrepancy between the two, it means having to either contribute more to rank-and-file participants, distribute excessive contributions to HCEs, or a combination of both. If excessive contributions are refunded, you’ll need to do so before March 15, 2021 (unless you have an Eligible Automatic Contribution Arrangement and get a 3 ½ month extension), or else incur a 10% excise tax.
Employer Contributions due for S Corporations, LLCs and Partnerships
March 15, 2021
If you’re an S Corporation, LLC or a Partnership and want to make a profit sharing contribution that is deductible in 2020, you’ll need to do it by March 15, 2021, unless you obtain an extension to file the entity’s tax return by filing Form 7004 by that date. (You’ll also need to ensure all matching contributions for 2020 is done by this date.)
Federal tax returns for individuals and C-corporations are due to the IRS
April 15, 2021
Tax day isn’t just a big to-do for individual taxpayers. Like anyone else, businesses need to file tax returns with the IRS, and C Corporations that use a calendar year taxable year have the same initial tax filing deadline.
As a way of incentivizing retirement savings, the IRS allows employers to deduct any contributions made to employee accounts. That means employer contributions are generally 100% tax-deductible. Here’s the thing: In order to claim these as deductible for the prior taxable year, if you are a C Corporation with a calendar year taxable year, the contributions have to be made no later than April 15 plus extensions.
Refund of excess derferrals due to employees
April 15, 2021
Employees are limited in the amount of the total elective deferrals they can make each year to all the plans in which they participated. For 2021, the 402(g) limit is $19,500, or 100% of your annual compensation, whichever is less. Participants who have attained age 50 by December 31, 2021 may make a “catch-up” contribution of up to another $6,500 or a combined dollar limit of $26,000. If you exceed this limit, the excess deferrals, plus an allocable share of the investment earnings, will be taxable income for the year deferred.
The excess deferrals for 2021, plus investment earnings, must be distributed to you by April 15, 2022 to avoid further negative tax consequences. If you miss the deadline for processing corrective distributions, the amount will be included in your taxable income twice—in 2021 and again upon receipt of the corrective distribution.
Guideline continually monitors our plans to help participants avoid exceeding this 402(g) limit unknowingly. When contributions exceed the annual deferral limit, we will issue refunds to participants for the excess contributions they made, plus earnings.
Summary of Material Modifications due to participants
July 29, 2021
If you amended your plan document in 2020 and did not update your Summary Plan Description, you must send all eligible employees a Summary of Material Modifications detailing out any changes within 210 days of plan year end.
Form 5500 due to the IRS
August 2, 2021
September 15, 2021 (for plan sponsors that are S Corporations, LLCs or Partnerships that filed Form 7004 to obtain an automatic extension to file its tax return)
October 15, 2021 (for plans that either filed Form 5558 and obtained an extension to file Form 5500 or for plans that are C Corporations that filed Form 7004 to obtain an extension to file its tax return)
Every year, plan sponsors are required to e-file a Form 5500 to the IRS. The filing includes important information about your business, retirement plans, and 401(k) participants. For the full scoop on the Form 5500 and its variants, click here.
Initially, the Form 5500 has to be filed by the last day of the seventh month after the plan year ends. If your plan has a calendar year plan year, that means the initial filing deadline is the following August 2. If you need more time, the IRS may grant you a 2½ month extension to the following October 15 if you submit the Form 5558.
Summary Annual Report must be distributed to employees
September 30, 2021
November 15, 2021 (for plan that are S Corporations, LLCs or Partnerships and filed Form 7004 to obtain a tax filing extension)
December 15, 2021 (for plan sponsors that are C Corporations and either filed Form 7004 or Form 5558 to obtain an extension to October 15, 2021)
The Summary Annual Report (SAR) discloses the total value of the company’s 401(k) plan and includes other details from your Form 5500.
The SAR needs to be distributed to participants within nine months after the end of the plan year.
Safe Harbor notices due to employees (for new plans)
September 1, 2021
If you’re starting a new 401(k) and want to make it Safe Harbor, you’ll need to let employees know 30 days in advance. This can be done even earlier, but not more than 90 days in advance. (Note: September 1 is 30 days before the October 1 deadline of starting a new Safe Harbor plan.)
Launch date for new Safe Harbor 401(k) plans
October 1, 2021
As mentioned earlier, starting a Safe Harbor 401(k) comes with a host of benefits for employers. If you’re starting a new plan from scratch (rather than upgrading an existing one), the last day to do so is October 1.
Safe Harbor notices due to employees (for existing plans)
December 1, 2021
If you’re upgrading your existing 401(k) to a Safe Harbor plan, you’ll need to let employees know 30 days in advance. This can be done even earlier, but not more than 90 days in advance.
Note: This is also the deadline to provide both Qualified Default Investment Alternative and auto-enrollment notices, if your plan has auto-enrollment and/or a QDIA.
Deadline for ADP/ACP corrections and retroactive amendments
December 31, 2021
Although you should be making most compliance corrections before this date, December 31 is the absolute last day you can self-correct ADP/ACP failures to retain qualified status. This includes making corrective distributions to the HCEs, special Qualified Nonelective Contributions to the non-HCEs or both.
December 31, 2021 is also the deadline to adopt discretionary amendments to the plan for 2021.
That’s a lot to keep track of. Thankfully, you don’t have to go it alone. From compliance testing to reporting, Guideline handles the hard parts of 401(k) administration so you don’t have to.
To see how we make managing retirement easy for employers and employees alike, schedule a demo with one of our 401(k) specialists today.
This content is for informational purposes only and is not intended to be construed as tax advice. You should consult a tax professional to determine what deadlines are applicable to you and your company.