As a result of the Treasury Department and Internal Revenue Service extending the 2019 tax filing deadline in Notice 2020-18 in response to the Coronavirus Disease for 2019 to July 15, 2020, certain self-employed persons may also delay making 2019 contributions to a self-directed solo 401k:
- The deadline to make contributions to a Solo 401k is tied to the tax deadline that applies to your self-employed business (See the chart on page 3 of IRS Publication 560).
- This means that for self-employed individuals who report their self-employment income on IRS Form 1040 (including sole proprietors and single-member LLCs taxed as sole proprietors), the deadline to make Solo 401k contributions is the deadline to file Form 1040.
- If the self-employed business is a C-corporation with an April 15, 2020 due date for filing the Form 1120, then the grace period under section 404(a)(6) for the employer to make contributions to its solo 401k plan that are treated as made on account of 2019 ends on July 15, 2020.
- Therefore and with the extension of the deadline to file Form 1040 to July 15, 2020, these self-employed individuals may now make their solo 401k contribution any time up until July 15, 2020 or later if they file a timely extension.
- Please note that this is an automatic extension, so no phone call to the IRS or filing of forms is required.The extended deadline will still be the standard October 15th Form 1040 tax filing deadline.
- Please note that this extension does not impact the deadline to set up a Solo 401k (which was 12/31/2019) so if you had not adopted a Solo 401k plan on or before December 31, 2019, this extension won’t allow you to make Solo 401k contributions for 2019.
More Things to Know
- You do not have to be sick, or quarantined, or have any other impact from COVID-19 to qualify for relief. You only need to have a Federal income tax return or payment due on April 15, 2020, as described above.
- The Notice postpones the filing and payment of Federal income taxes reported on the following forms:
- Form 1040, 1040-SR, 1040-NR, 1040-NR-EZ, 1040-PR, 1040-SS
- Form 1041, 1041-N, 1041-QFT
- Form 1120, 1120-C, 1120-F, 1120-FSC, 1120-H, 1120-L, 1120-ND, 1120-PC, 1120-POL, 1120-REIT, 1120-RIC, 1120-SF
- Form 8960
- Form 8991
- With respect to Form 990-T, if that Form is due to be filed on April 15, then it has been postponed to July 15 under the Notice. For taxpayers whose Form 990-T is due on May 15, that due date has not been postponed under the Notice.
- With respect to returns due on March 16, 2020, which include Form 1065, Form 1065-B, Form 1066, and Form 1120-S for calendar year taxpayers, the filing of those returns has not been postponed.
- State income taxes will still need to be filed and paid by the normal deadline.
Click here to vie the IRS Coronavirus tax relief page, and visit IRS Notice 2020-18.