LAST REVIEWED Feb 05 2021 20 MIN READ
By Damian Davila
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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.
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.
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:
Date of birth
Date of hire
Termination date (if applicable)
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, RMDs begin at age 70 ½
If a participant reaches age 72 after January 1, 2020, RMDs begin at age 72
Subsequent RMDs must be taken by the end of the tax year rather than April 1.
April 15: Tax Day
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. 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 31: File Forms 5500, 5558, 5330
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. If your plan had delayed contributions during the previous calendar year, then July 31 is also the deadline for filing Form 5330 (you have 15 months after the plan year ends to file delayed distributions as a result of failed compliance tests).
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 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.
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 (note: it was age 70 ½ if you reach 70 ½ before January 1, 2020), other than a 5-percent owner, who retired in the current year).
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|
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.
April 15: File federal taxes
Unlike in previous years, Tax Day 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.
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 is 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
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 to 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.
Note: For 2020, several changes were announced, including:
Delayed deadlines as a result of the CARES Act and the coronavirus pandemic. One other CARES Act change: There is no requirement to take an RMD in 2020.
Changes related to the SECURE Act, a large piece of retirement legislation passed in December 2019
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.