When employee deferrals are due
Two things set this deadline: whether your business pays you through payroll, and whether the plan existed during the tax year.
If you are a sole proprietor or other pass-through filer and your plan was established during the tax year, you may fund employee deferrals up to your business tax filing deadline, including extensions. There is no payroll event in a pass-through structure, so deferrals are calculated against income you determine at filing rather than withheld across the year.
If you are a sole proprietor with no employees and you adopt the plan after the tax year has ended, Section 317 of the SECURE 2.0 Act still allows employee deferrals for that prior year. The window closes on your tax filing deadline without regard to extensions, generally April 15. Filing an extension does not move it.
If your business pays you W-2 wages, the deadline is December 31 of the plan year. Deferrals are withheld from wages, and wages cannot be reduced retroactively, so the final payroll of the year is your last opportunity. Funds withheld from that payroll are deposited in the days that follow, consistent with ordinary payroll processing, but no later payroll and no filing extension reopens the year.
When the plan must be established
Establish the plan by December 31 of the tax year to keep every contribution type available.
A plan adopted after year end is still permitted, with narrower options. A sole proprietor with no employees who adopts by the filing deadline without extensions can make both employee deferrals and employer profit-sharing contributions for the prior year. A plan adopted after that date, within the extended filing window, accepts employer profit-sharing contributions only.
When employer profit-sharing is due
Employer profit-sharing contributions may be made up to the business tax filing deadline, including extensions, in any business structure. The date depends on which return the business files. For calendar-year filers:
- Sole proprietor or single-member LLC filing Schedule C with Form 1040: October 15
- Partnership or multi-member LLC filing Form 1065: September 15
- S corporation filing Form 1120-S: September 15
- C corporation filing Form 1120: October 15
When a deadline falls on a weekend or holiday
If a contribution deadline falls on a Saturday, Sunday, or federal holiday, it shifts to the next business day.
A note on timing
Contribution deadlines interact with your overall tax return preparation. Confirm your amounts and dates with your tax advisor before filing, particularly in a year when you are making catch-up contributions or changing your contribution approach.
Frequently Asked Questions
Can I make employee deferral contributions after December 31 if I'm in a pass-through entity?
Usually yes, and the answer turns on when the plan was established. If your plan was in place during the tax year, there is no payroll event to link deferrals to, so you determine your income at filing and may fund deferrals up to your business tax filing deadline including extensions. If you are a sole proprietor adopting the plan after the tax year has already ended, you may still make deferrals for that year, but only through the filing deadline without extensions.
Does filing an extension give me more time to make first-year deferrals in a plan I adopt after year end?
No. The retroactive deferral window for a plan adopted after the tax year closes on the tax return due date without regard to extensions. An extension moves your filing date and your employer profit-sharing deadline, but not this one.
What if I miss the final payroll of the year for my W-2 employee deferrals?
If you operate through a corporation and the year ends with no deferral withheld from payroll, you will generally be unable to make employee deferral contributions for that tax year. Employer profit-sharing contributions remain available until the corporate tax filing deadline including extensions.