we have a client that told us they want to make a PS for 2006 plan year. When I spoke with her today I told her that it had to be funded by the time they file corp income taxes. She thinks it has already been file. Can they still fund the PS contribution until the filing deadline of 3/15/07 or did they have to fund by the time they filed the return? Thanks for any input.

http://benefitslink.com/boards/index.php?showtopic=15654

Whew, there is alot of discussion in that other topic. I think some more information is needed to address saotampa's question.

If the client did already file the corp. tax return, did they deduct any ps contribution? If not, they must file an amended return to deduct any contribution they make.

It is my understanding that the ps contribution can be contributed to the plan by the due date for the tax return, regardless of when the return is actually filed. So, do they have an extension or are they going to file for an extension? If not, I say ps contribution should be deposited by 3/15/2007. If there is an extension, then the ps contribution can be deposited by the extension due date.

Code section 404(a)(6):
(6) Time when contributions deemed made
For purposes of paragraphs (1), (2), and (3), a taxpayer shall be deemed to have made a payment on the last day of the preceding taxable year if the payment is on account of such taxable year and is made not later than the time prescribed by law for filing the return for such taxable year (including extensions thereof).

thanks for the responses. The client doesn't know if their accountants put the deduction on their return. If they didn't, they will have to file an amended return. She said she thinks the decision was made after the return was filed, so she is checking with them. I thought they had until the filing deadline of March 15th, if the have not filed an extension, to fund, but I couldn't find anything in our resources. Thanks again.