Recent funding legislation changed the filing deadlines for Form 5500 and the Form 990 series forms. The Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 directed the Internal Revenue Service to revise the maximum automatic extension period for Form 5500, Annual Return/Report of Employee Benefit Plan, from 2 1/2 to 3 1/2 months, for plan years beginning after December 31, 2015. Therefore, although the annual reports are still due by the end of the seventh month following the end of the plan year, the automatic extension period available to the plan will increase by one month. For calendar year plans, the extended deadline will be November 15, starting with the 2016 plan year with due dates in 2017. The 2 1/2 month extension will continue to apply for the 2015 plan year. The deadlines for the related Form 8955-SSA and the Summary Annual Report will most likely also be revised to conform to these changes.
Tax-exempt entities, including trusts established under a health and welfare benefit plan, file Form 990, Return of Organization Exempt from Income Tax, which are generally due by the 15th day of the fifth month after the end of the plan year (May 15 for a calendar year plan). For taxable years beginning in 2016, tax-exempt trusts can obtain an automatically approved extension of six months for their Form 990 filing. Such trusts were previously eligible for an automatically approved extension of three months, but a second three month extension was not available without a request detailing the need for additional time.
Certain benefit plans also file Form 990-T, Exempt Organization Business Income Tax Return, for any unrelated business income that is subject to tax. These plans often receive a flow-through of partnership income through its investments in limited partnerships. Such forms are due by the 15th day of the fourth month after the taxable year of the trust (April 15 for a calendar year plan). Although an automatic extension period of three months is available, and a chance to request an additional three months for reasonable cause, any estimated taxes owed with this return are due by the initial filing deadline. Because the partnerships were not required to report their income and file tax returns until that same deadline (the 15th day of the fourth month after the taxable year or April 15 for a calendar year), many benefit plans did not receive information regarding their flow-through of partnership income in time to make a timely filing and payment. For taxable years that begin in 2016 or later, the initial filing deadline for the Form 1065, U.S. Return of Partnership Income, will be the 15th day of the third month after the taxable year of the partnership or March 15 for a calendar year.
The change to the filing deadline for partnerships, as described above, as well as a change for C corporations filing Form 1120, U.S. Corporation Income Tax Return, from the 15th day of the third month after the taxable year (or March 15 for a calendar year corporation) to the 15th day of the fourth month after the taxable year (or April 15 for a calendar year corporation), will also affect benefit plan contribution timing for those entities. Generally, an employer must make a contribution to a qualified retirement plan by the due date for filing the employer's tax return for that year, in order for the contribution to be deductible for the employer. Contribution deadlines will shift accordingly.
By Timothy D. Lakis, CPA, CFE, Partner, firstname.lastname@example.org