IRS Extends Due Date for Certain DB Plan Excise Taxes

The IRS has issued Announcement 2020-17, postponing until January 15, 2021, the due date for reporting and paying an excise tax that results from a delay in making certain minimum required contributions to single-employer defined benefit (DB) pension plans. The reporting is on Form 5330, Return of Excise Taxes Related to Employee Benefit Plans. The excise tax for such failures is 10 percent of unpaid minimum required contributions.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act, legislation enacted to provide relief to individuals and businesses affected by the coronavirus (COVID-19) pandemic, provided that the due date for paying any minimum required contribution that would otherwise be due during calendar year 2020—including quarterly installments—is extended until January 1, 2021. 

However, notwithstanding this extension, there remained the potential that the reporting and paying of excise tax on certain unpaid contributions would have been required by September 15, 2020. The IRS notes in Announcement 2020-17 that "…in order to coordinate the due date for reporting and paying the … excise taxes with the extended due date for paying the minimum required contributions … the Treasury Department and the IRS are postponing the reporting and payment due date for those taxes."

The postponement is to the aforementioned January 15, 2021, date.