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401(k) Deadlines for Employers and Employees

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Whether you’re an employer or an employee, setting up a 401(k) plan is not only a great way to prepare for retirement, but also a source of tax advantages

  • For employers: To maximize the benefits of your 401(k) program, you have to keep in mind deadlines for key events, including several steps in the administration and compliance taking Required Minimum Distributions and for launching a safe harbor 401(k) plan (one of the most common 401(k) plan types).
  • For employees: You’ll want to track contribution deadlines, tax filings, as well as when to expect communications from your employer and/or plan sponsor regarding your 401(k).

Here’s a comprehensive list* of 401(k) deadlines for employers and employees, including action items and links where you can find additional information. This may seem like an intimidating list, but keep in mind that Human Interest can help you understand and meet all of these deadlines so that you can make the most out of your 401(k) plan and help employees throughout your company save for the future. 

For 2020, several changes were announced, including: 

  • Delayed deadlines as a result of the CARES Act and the coronavirus pandemic
  • Changes related to the SECURE Act, a large piece of retirement legislation passed in December 2019 

401(k) Deadlines for Employers 

for plan years ending 12/31

January 1: Start of safe harbor 401(k)

A safe harbor 401(k) plan is a type of tax-deductible 401(k) plan that ensures all employees at a company have some set of minimum contributions made to their individual 401(k) plans, regardless of their title, compensation, or length of service.

If you have an existing, regular 401(k) plan, you cannot add safe harbor to it in the middle of the year. January 1st is the date on which existing 401(k) plans can begin anew as safe harbor 401(k) plans. If you follow the deadlines in the links below, you can take the right steps to have it launched for the following year.

Learn more: Safe Harbor 401(k) Plans: Everything You Need to Know

January 15: Prior year census data

401(k) administrators must provide the prior year’s census data to the plan’s recordkeeper, which contains pertinent information for each employee at the company including:

  • Name
  • Date of birth
  • Date of hire
  • Termination date (if applicable)
  • Hours worked
  • Compensation and amounts contributed to the 401(k) during the year

The recordkeeper uses this census data to complete compliance testing for guidelines from the U.S. Department of Labor (DOL) and the IRS.

January 31: Issue Form 1099-R

Deadline for sending Form 1099-R to plan participants who received distributions during the previous year. Learn more: About Form 1099-R.

February 14: Deadline for Q4 participant statements 

This is the deadline for plan sponsors to send Q4 (prior year) statements to participants. 

February 28: File Form 1099-R

Deadline for filing Form 1099-R with the IRS to report plan distributions made in the previous year. Note: The deadline for electronic filing of Form 1099-R is March 31.

March 15: Corrective distributions

Deadline for processing corrective distributions for failed prior year actual deferral percentage (ADP)/actual contribution percentage (ACP) tests without a 10% excise tax. IRS Form 5330, Return of Excise Taxes Related to Employee Benefit Plans, is required.

A special deadline may apply to plans that are categorized as an eligible automatic contribution arrangement (EACA). See the June 30 deadline below.

March 31: File Form 1099-R electronically

If filing Form 1099-R electronically, March 31 is the deadline to report distributions made last year.

April 1: Initial RMDs

For participants turning a certain age by January 1, their initial Required Minimum Distribution (RMD), is required by April 1. 

  • If a participant reaches age 70 ½ before January 1, 2020: Age 70 ½ 
  • If a participant reaches age 72 after January 1, 2020: Age 72

Subsequent RMDs must be taken by the end of the tax year rather than April 1. 

April 15: Tax Day Note: not relevant for 2020, the deadline to file taxes and make contributions to IRAs has been extended to July 15, 2020 

This is the typical deadline by which you have to file your federal tax return (and your personal taxes), but you also have to process corrective distributions for IRC Section 402(g) excesses.

Also, today is the last day to fund your employees’ accounts and still receive a tax deduction for the prior tax year. Employers can receive tax benefits for contributing to 401(k) plans, too – the tax code wants to encourage saving for retirement, so employers are offered tax incentives to contribute, as well as to offset the cost of setting up retirement plans.

One of these incentives is the Credit for Small Employer Pension Plan Startup Costs, a tax credit that was increased 10-fold with the passing of the SECURE Act at the end of 2019. Now employers starting a retirement plan can reduce tax liability by up to $5,000 a year for up to three years!

This is also the deadline for employer contributions for sole proprietorships filing Schedule C as well as C-corporations.

This is also the deadline for refunding excess deferrals to employees who exceeded their contribution limit last year.

May 15: Deadline for Q1 statements 

This is the deadline for plan sponsors to send Q1 statements to participants. 

June 30: Keep an eye on the special deadline for correcting distributions (for EACA plans)

For plans containing an automatic enrollment feature that satisfies certain requirements: Form 5330 and the excise tax don’t apply until after the first 6 months after the end of the plan year, which is June 30. Learn more: EACA FAQs

July 15: 2020 tax deadline

As a result of the CARES Act, the deadline to file 2019 tax returns, as well as to make contributions to 401(k)s and IRAs, is postponed to July 15, 2020. 

July 31: File Form 5500

File IRS Form 5500 with the Department of Labor to satisfy the required annual reporting under ERISA. The service provider typically prepares the Form 5500, the recordkeeper fills out the questionnaire, and the plan manager signs the form, or, with Human Interest, we prepare and file the form for you. If you need to request an extension for Form 5500, remember to file Form 5558 by July 31.

August 14: Deadline for Q2 participant statements 

This is the deadline for plan sponsors to send Q2 statements to participants. 

September 1: Safe harbor notices

This is the deadline for plans that are starting safe harbor to send notices to participants. 

September 15: Form 5500 deadline for S Corps, LLCs, Partnerships

This is the deadline for filing Form 5500 with the IRS for plan sponsors who are S Corporations, LLCs or Partnerships(if automatic corporate tax extension, but no Form 5558 was filed).

10/15/20 – 5500 due date with extension. 12/1/20 – Safe Harbor Match notices due to eligible participants 12/15/20 – SAR (Summary Annual Report) must be distributed to eligible participants – for all plans with 5500 extension.

September 23, 2020: Last day to take out COVID-related loans

Through the CARES Act, the 401(k) limit was increased to $100,000 (or 100% of vested balance, whichever is less) and September 23, 2020, was identified as the last day that qualified individuals can take advantage of these COVID-related provisions. 

September 30: Distribute Summary Annual Report to plan participants

The Summary Annual Report (SAR) is a narrative summary of the plan’s financial status and summarizes the information on the plan’s annual report. According to the IRS, the SAR must be distributed to eligible participants and should include the following:

  • Administrative expenses incurred by the plan
  • Amount of benefits paid to participants and beneficiaries
  • Total value of plan assets
  • A pension plan’s compliance with the minimum funding standards
  • Right to receive a copy of the full annual report, or any part thereof

The SAR is provided on the latter of these two dates: nine months after the end of the plan year (September 30) OR two months after the SAR is due (if an extension has been granted by the IRS). If you have filed an extension, your deadline will be extended to December 15. 

October 1: Launch a new safe harbor 401(k) plan

For the first year of a new safe harbor plan, the safe harbor plan must be in effect for a minimum of 3 months, which is why October 1 is the deadline to launch. 

October 15: Extended Form 5500 deadline

This is the extended deadline for filing Form 5500 (where a Form 5558 extension was filed and no other extensions apply).

November 2: Issue SIMPLE 401(k) notices

Give SIMPLE 401(k) plan notices to eligible employees to notify them of their next year’s salary reduction rights and whether the employer required contributions will be matching or nonelective contributions.

Early November: Plan ahead for required December 1 notices

There is a December 1 deadline for employee notices (more on that below!) that determines two November deadlines:

  • If you have an existing safe harbor plan and would like to change the type of safe harbor (example: safe harbor enhanced match → safe harbor non-elective), this must be decided prior to December 1st so that the notices can be distributed by December 1st.
  • If you have an existing 401(k) plan that’s not safe harbor, to amend your IRS plan documents to enact a safe harbor 401(k) plan for the following calendar year, you must let your provider know prior to December 1st.

Other required notices include qualified default investment alternative (QLDIA) and automatic contribution arrangement notices. For administrative ease, a combined notice covering all notices may be provided.

November 16: Deadline for Q3 participant statements 

This is the deadline for plan sponsors to send Q3 statements to participants. 

This is also the deadline for sending the Summary Annual Report (SAR) to eligible employees for any plan sponsors that received an extension. 

December 1: Issue safe harbor plan notices

Today is the date by which all safe harbor plans, both new and old, must have distributed a notice to eligible participants. The rule is at least 30 days before the first day of the year, so for a plan that will be safe harbor in 2019, December 1st, 2018 is that date.

December 15: Distribute Summary Annual Report, if extension

This is the deadline by which plan sponsors need to distribute the Summary Annual Report (SAR) to eligible employees if the plan sponsor has an extension. 

December 31: Important 401(k) must-do items before year-end

  • Correct a failed ADP/ACP test with qualified nonelective contributions.
  • Distribute prior year’s 401(k) excess contributions and excess aggregate contributions (both adjusted for prior year’s income and losses).
  • Set up a qualified retirement plan for the current year. Remember that you can’t have retroactive elective deferrals!
  • Distribute current year RMDs (you have until next year’s April 1 to pay the first RMD for a participant who turned 72 in the current year for a participant (age 70 ½ if you reach 70 ½ before January 1, 2020), other than a 5-percent owner, who retired in the current year). Through the CARES Act, there is no requirement to take an RMD in 2020. 
  • Amend plan documents if you wish to convert an existing 401(k) plan to a safe harbor design for the next plan year.
  • Amend plan documents if you wish to remove safe harbor status for the next plan year.

January 1, 2022: CARES Act provisions deadline

The last day to amend your 401(k) plan to adhere to the CARES Act provisions. 

401(k) Deadlines for Employees 

January 1: Start contributing towards the current year’s limit

This is the first day that you can start contributing to your 401(k) for the current year. The sooner you start, the more you can spread out your contributions across more paychecks (as opposed to attempting to max out with just a few paychecks left in the year). 

Employee contribution limit: 

Year

Under age 50 

Age 50 or older

2021

$19,500

$26,000

2020

$19,500

$26,000

2019

$19,000

$25,000

2018

$18,500

$24,500

April 1: Your first RMD

When you’re of retirement age, annual withdrawals from a 401(k) become required. Also called Required Minimum Distributions (RMDs), they start at: 

  • Age 70 ½ — if you reach 70 ½ before January 1, 2020
  • Age 72 — if you reach age 72 after January 1, 2020 

Subsequent RMDs must be taken by the end of the tax year rather than April 1. 

Note for 2020: Through the CARES Act, there is no requirement to take an RMD in 2020. 

April 15: File federal taxes

Unlike in previous years, Tax Day 2019 falls right on April 15th. If you’re expecting a bonus or commission check from your employer for prior year performance and would like to stash it away on your 401(k), you can only wait until that day for that employer contribution to take place. Plan ahead to maximize your nest egg.

June 15: Don’t forget about that extension deadline

In a typical year, you can apply for a two month extension for filing your individual taxes. Remember that if you owe taxes to Uncle Sam, interest applies. In 2020, the tax deadline isn’t until July, so you still have time. 

July 15: Deadline to contribute in 2020 

As a result of the CARES Act, the contribution deadline for IRAs has been pushed out from the usual annual deadline of April 15. 

Sometime between October 1 and November 1: Open enrollment begins

Your employer will start announcing the start of the open enrollment period to choose your workplace benefits for the next year. If you haven’t set up your 401(k), now it’s the time to do so. You can only sign up for your employer’s 401(k) during the open enrollment period that they determine, which is usually at the end of the year, unless you go through a major life event, including marriage, the birth of a child, or death of a spouse. At Human Interest, we’re able to allow employees to sign up at any point in the year, no matter when they joined the company.

December 31: RMD deadline *not required for 2020*

The last day to take RMDs from your 401(k) (and IRA, if applicable).

Also, today is the last day to set up your 401(k) so that eligible contributions count towards the current year. As mentioned earlier, this is key when expecting a commission or bonus from your employer at the beginning of the next year. If you want that potential employer contribution count towards the year that is about to end, you need to act right away.

As the year draws to a close, year-end financial planning may not seem like a priority. However, getting all of your home finances in order now will help set you up for success in the new year.

The Bottom Line

Both employers and employees receive tax benefits for contributing to a 401(k) plan. Employees can build their nest eggs tax-free, while employers enjoy tax credits and write-offs, lower employee turnover, and a more productive workforce. If you’re a small business, a low-fee retirement program can benefit your employees and your bottom line.

If you’re looking for a 401(k) provider that will help make sure you’re covered on all of these deadlines. We provide support for compliance for 401(k) and 403(b) plans. Click here to find out more about Human Interest.

Damian Davila is a Honolulu-based writer with an MBA from the University of Hawaii. He enjoys helping people save money and writes about retirement, taxes, debt, and more.

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Disclosures

The content in this blog post has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction. Human Interest's investment advisory services are provided by Human Interest Advisors, LLC, an SEC-Registered Investment Adviser. Investing involves risk and may result in loss. Past performance is no guarantee of future results, and expected returns may not reflect actual future performance.