IRS Postpones Excise Tax Due Dates for Minimum Required Contributions Delayed Under the CARES

The IRS in Announcement 2020-17 has said that it is postponing until Jan. 15, 2021 the due date for reporting and payment of excise taxes relating to minimum required contributions delayed under Section 3608(a) of the CARES Act. The IRS issued Announcement 2020-17 on Sept. 10.

 

The Jan. 15, 2021 due date applies to reporting and paying excise taxes under Internal Revenue Code Sections 4971(a)(1) and 4971(f)(1) regarding certain delayed minimum required contributions to a single-employer defined benefit plan. The postponement applies concerning required contribution to which the extended due date under Section 3608(a) of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, applies. Section 3608(a)(1) of the CARES Act provides that the due date for paying any minimum required contribution under Internal Revenue Code Section 430(j) that would otherwise be due during calendar year 2020 is extended until Jan. 1, 2021. 

 

The IRS had issued Notice 2020-61 on August 6, 2020; it provides guidance regarding Section 3608 of the CARES Act, including the extended due date under Section 3608(a)(1) for making a minimum required contribution.   

 

 

Absent the relief provided in Announcement 2020-17, the due date for paying the minimum required contribution for a plan year ending Dec. 31, 2019, would be Sept. 15, 2020, and the determination of whether a plan has an unpaid minimum required contribution for that plan year also would be made as of that date. Also, without the extension, the due date for the employer’s reporting and payment obligations for the excise taxes concerning unpaid contributions would be Sept. 15, 2020. 
 
Because of the extension, if an employer that is a calendar-year taxpayer maintains a single-employer, calendar-year pension plan that is subject to Code Section 430 fails to pay the minimum required contribution for the 2019 plan year by the extended due date of Jan. 1, 2021, the employer would have to pay excise tax under Code Section 4971(a). Similarly, if the employer fails to pay a required installment under Code Section 430(j)(3) to satisfy a liquidity shortfall by the delayed due date of Jan. 1, 2021, the excise tax under Code Section 4971(f) would apply. 

 

 

Announcement 2020-17 overrides the due date provided on Form 5330 and under the Form 5330 instructions for reporting and paying the excise taxes under Code Sections 4971(a)(1) and 4971(f)(1) regarding a minimum required contribution to which Section 3608(a) of the CARES Act applies.

 

Announcement 2020-17 does not apply to the due dates for other excise taxes required to be reported on Form 5330.