Is There a Deadline for True-Up Contributions?

Q: I read your recent Ask the Experts column explaining true-up contributions. The column states that such contributions “would be made at year-end.” However, as a 403(b) plan sponsor administering this provision, it does take us some time to calculate all of our true-up contributions. Is there a deadline for such contributions to be made?

Kimberly Boberg, Kelly Geloneck, Emily Gerard and David Levine, with Groom Law Group, and Michael A. Webb, senior financial adviser at CAPTRUST, answer:

A: Excellent question! The contribution deadline for true-up contributions is the same deadline as for employer contributions in general, so it does allow for some time to calculate and allocate true-up contributions. We covered the employer contribution deadline in another recent column; in general, to be considered an annual addition for 415 limit purposes, contributions must be made to the 403(b) plan no later than the 15^th day of the 10^th calendar month following the end of the calendar year or fiscal year (as applicable, depending on the basis on which the employer keeps its books) with or within which the particular limitation year (typically calendar year) ends.

Thus, if the 2024 limitation year ends December 31, 2024, and the employer fiscal year aligns with the calendar year, 2024 employer contributions, including true-ups, must be made by October 15, 2025, to count as an annual addition for 2024.

NOTE: This feature is to provide general information only, does not constitute legal advice and cannot be used or substituted for legal or tax advice.

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