Important Reminders for 2013

401(k) Deposit Rules

Employers are required to deposit employees contributions that are withheld from an employee’s pay to the retirement plan as soon as administratively feasible, or by 7 business days of the date they were withheld in order to be deposited timely.

Employer Deposit Rules

The due date of an employer’s federal tax return is based on the employer’s entity type.  The due date for corporations (C or S) is two and a half months after year end.  The federal tax return can be extended for six months after the return due date.  For a calendar year employer, the tax return due date is March 15 and the return can be extended until September 15.


For participants who received distributions or defaulted on their loans during 2012, 1099-R's must be distributed to them by January 31, 2013.

Electronic Signing of Form 5500

Beginning with the 2009 plan year, Form 5500 must be electronically signed. If you have not already obtained the needed User ID and PIN, visit and register to obtain these.

Depositing Distribution Withholdings

Employers that pay out cash distributions to participants are required to withhold 20% of the distribution. In most cases, the withholding must be deposited with the IRS by the 15th day of the following month. All withholding must be deposited with the IRS electronically using EFTPS beginning January 1, 2011. See details in IRS Publication 15.

Non-Discrimination Testing Refunds

If refunds are made to correct a non-discrimination test failure, the refunds must be processed within 2 ½ months following the close of the plan year in order to avoid the IRS 10% penalty. For plans with a December 31 year-end, refunds must be made by March 15, 2013 to avoid the 10% IRS penalty.

Minimum Required Distributions

Minimum Required Distributions (MRD) must be taken by active employees who have reached age 70.5 during the calendar year and are more than 5% owners. If an employee is active, reaches the age of 70.5 and is not at least a 5% owner, he does not have to begin taking MRDs until he terminates employment. The first MRD must be taken by April 1 of the year following st the year the employee attains age 70.5 or terminates employment, whichever applies. All following MRDs must be taken by December 31st of subsequent years.

Depositing Employee Contributions

Employee contributions for small plans must be deposited as soon as administratively possible, or within 7 business days per the safe harbor deposit rules. Please deposit employee contributions within 7 business days if possible. Failure to timely deposit employee contributions results in an IRS penalty and the Employer paying the employees for lost interest.

Retirement Plan Notice

Participants must receive quarterly or annual notices containing their account balances, vested percentages, information about diversifying, a reference to the Department of Labor’s website, and information about contribution integration if applicable. Check your participant’s investment company statements to confirm what information is included. If any of this information is missing, contact ARS for a copy of the Retirement Plan Notice.

Depositing Employer Contributions

Employer Contributions must be deposited before the filing due date of your company tax return. Company tax returns are due 2 ½ months after the close of the corporate year, or 8 ½ months if extended. For years ending December 31, 2012, company tax returns are due March 15, 2013, or, with extension, are due September 16, 2013.

401(a)(17) Compensation Limit

The IRS limits the amount of compensation that counts for qualified plan purposes in a given plan year, including the calculation of employer or matching contributions. For 2013 the compensation limit is $255,000. The compensation limit that applies for a plan year is the limit applicable for the calendar year in which the plan year starts.

Filing Form 5500

Form 5500's are due by the end of the 7th month after the close of the plan year, or by 9 ½ months after the close of the plan year if extended. For plan years ending December 31, 2012, Form 5500's without extension are due by July 31, 2013 and with extension are due October 15, 2013.

401(k) Limit

The IRS limits the 401(k) contributions an employee can make in a given calendar year. For 2013 the 401(k) limit is $17,500 plus an additional $5,500 as catch-up contributions for employees age 50 and over. The limit includes both pre-tax 401(k) and Roth 401(k) contributions combined.