2022 401(k) deadlines for plan sponsors

If staying ahead of 401(k) deadlines feels like a full-time job, that’s because it actually is. The long list of reporting requirements, tax forms, deadlines and employee notices you need to consider might seem daunting. If you’re a small business owner, it might even dissuade you from offering a 401(k) plan in the first place. It shouldn’t, especially if you have help.

Below are some of the important deadlines that plan sponsors should be mindful of heading into the new year.

401(k) plan sponsor deadlines for a January 1 to December 31 plan year

Your individual filing dates may be different if you have an off-calendar plan year, or if you file extensions for your business tax filings. When you have questions always speak to your tax professional to ensure your tax filings are timely.

January 1, 2022: Start of 401(k) Safe Harbor status for existing plans

Want to add Safe Harbor status to your existing 401(k) plan? Doing so comes with a slew of benefits, especially when it comes to managing compliance and discrimination testing. Here’s the thing: Safe Harbor status can only take effect for existing plans on January 1, so be sure to work with your administrator by the start of the previous year’s Q4 to get the ball rolling. Keep in mind that you’ll need to give your employees advance notice of the switch no later than December 1.

A Safe Harbor match is an employer contribution that is made to an employee’s account, based on how much the employee contributes to their account themselves. A Safe Harbor nonelective, on the other hand, is an employer contribution of 3% or more, made to an employee’s account regardless of whether or not the employee contributes.

Note that a Safe Harbor Nonelective Contribution can be added anytime mid-year, without the traditional Safe Harbor notice requirements. For mid-year amendments made before 12/1, the minimum nonelective contribution must be 3%. If the plan wants to add a Safe Harbor Nonelective Contribution after 12/1, the minimum is 4%.

January 31, 2022: Form 1099-R must be distributed to participants who received a distribution

For tax purposes, there’s earned income, and then there’s retirement income. The Form 1099-R represents the latter. This form is due to plan participants who, in the preceding year, withdrew funds from a retirement plan, exceeded annual contribution limits, or transferred funds from one account to another.

While plan administrators won’t have to file the Form 1099-R with the IRS for another month (see below), they’ll need to provide either a paper or electronic version to those participants no later than January 31. That should be easy to remember, since Forms W-2 and 1099-MISC are due to employees and contractors on the same day.

Quarterly Statement must be provided to participants:

All participants in the plan must get statements at least quarterly. February 14, 2022 is the deadline to provide Q4 statements for 2021. For all quarters in 2022, the statements are due 45 days after quarter end.

Form 1099-R must be filed with the IRS:

By now, you’ve provided the participants who received a distribution in 2021 with a copy of the Form 1099-R. As covered above, this is the form that details an individual’s withdrawals from a retirement or profit-sharing plan. While you’ve given these to employees, plan administrators also need to file copies of these forms with the IRS. If you’re sending a physical copy, the deadline is February 28, 2022. If you’re filing electronically you’ll have until March 31, 2022 to do so.

Corrective distributions are due to employees:

When your plan doesn’t have Safe Harbor status, it’s subject to nondiscrimination testing. The testing looks at what you’ve contributed to both rank-and-file and highly compensated employee (“HCE”) accounts.

When there’s a notable discrepancy between the two, it means having to either contribute more to rank-and-file participants, distribute excessive contributions to HCEs, or a combination of both. If excessive contributions are refunded, you’ll need to do so before March 15, 2022 (unless you have an Eligible Automatic Contribution Arrangement and get a 3 ½ month extension), or else incur a 10% excise tax.

March 15, 2022: Employer Contributions due for S Corporations, LLCs and Partnerships

If you’re an S Corporation, LLC or a Partnership and want to make a profit sharing contribution that is deductible in 2021, you’ll need to do it by March 15, 2022, unless you obtain an extension to file the entity’s tax return by filing Form 7004 by that date. (You’ll also need to ensure all matching contributions for 2021 is done by this date.)

April 15, 2022: Federal tax returns for individuals and C-corporations are due to the IRS

Tax day isn’t just a big to-do for individual taxpayers. Like anyone else, businesses need to file tax returns with the IRS, and C Corporations that use a calendar year taxable year have the same initial tax filing deadline.

As a way of incentivizing retirement savings, the IRS allows employers to deduct any contributions made to employee accounts. That means employer contributions are generally 100% tax-deductible. Here’s the thing: In order to claim these as deductible for the prior taxable year, if you are a C Corporation with a calendar year taxable year, the contributions have to be made no later than April 15 plus extensions.

April 15, 2022: Refund of excess deferrals due to employees

Employees are limited in the amount of the total elective deferrals they can make each year to all the plans in which they participated. For 2022, the 402(g) limit is $20,500, or 100% of your annual compensation, whichever is less. Participants who have attained age 50 by December 31, 2022 may make a “catch-up” contribution of up to another $6,500 or a combined dollar limit of $27,000. If you exceed this limit, the excess deferrals, plus an allocable share of the investment earnings, will be taxable income for the year deferred.

The excess deferrals for 2022, plus investment earnings, must be distributed to you by April 15, 2023 to avoid further negative tax consequences. If you miss the deadline for processing corrective distributions, the amount will be included in your taxable income twice—in 2022 and again upon receipt of the corrective distribution.

Guideline continually monitors our plans to help participants avoid exceeding this 402(g) limit unknowingly. When contributions exceed the annual deferral limit, we will issue refunds to participants for the excess contributions they made, plus earnings.

June 30, 2022: Process corrective distributions for failed ADP/ACP test from plan with EACA

Guideline plans offer automatic enrollment- and the vast majority of these plans are Eligible Automatic Contribution Arrangement (EACA) plans. EACA plans allow participants who are auto-enrolled to request a refund of their contributions within the first 90 days of their first contribution.

Plans have until June 30th to process corrective distributions for failed ADP/ACP tests in EACA plans without a 10% excise tax imposed.

As a reminder, the ADP/ACP tests are nondiscrimination tests that limit the benefits that highly compensated employees can receive based on the benefits provided to non-HCEs. The ADP test reviews employee salary deferrals, whereas the ACP test reviews company matching contributions.

July 29, 2022: Summary of Material Modifications due to participants

If you amended your plan document in 2021 and did not update your Summary Plan Description, you must send all eligible employees a Summary of Material Modifications detailing any changes within 210 days of plan year end.

July 31, 2022: Adopt Post PPA documents

Every 6 years the IRS requires employers to restate their qualified retirement plan documents to incorporate any recent legislative and regulatory changes that occurred since the documents were last written. The current restatement cycle for pre-approved defined contribution plans, known as the “Cycle 3 Restatement,” is the two-year period that began on August 1, 2020, and closes on July 31, 2022. All active 401(k) plans must have their plan documents restated for appropriate Cycle 3 language by the end of this period.

Form 5500 due to the IRS

August 1, 2022:

September 15, 2022:

Deadline for plan sponsors that are S Corporations, LLCs or Partnerships that filed Form 7004 to obtain an automatic extension to file its tax return

October 15, 2022:

Deadline for plans that either filed Form 5558 and obtained an extension to file Form 5500 or for plans that are C Corporations that filed Form 7004 to obtain an extension to file its tax return)

Every year, plan sponsors are required to e-file a Form 5500 to the IRS. The filing includes important information about your business, retirement plans, and 401(k) participants. For the full scoop on the Form 5500 and its variants, click here.

Initially, the Form 5500 has to be filed by the last day of the seventh month after the plan year ends. If your plan has a calendar year plan year, that means the initial filing deadline is the following August 2. If you need more time, the IRS may grant you a 2½ month extension to the following October 15 if you submit the Form 5558.

Summary Annual Report must be distributed to employees

The Summary Annual Report (SAR) discloses the total value of the company’s 401(k) plan and includes other details from your Form 5500.
The SAR needs to be distributed to participants within nine months after the end of the plan year.

October 1, 2022: Launch date for new Safe Harbor 401(k) plans

As mentioned earlier, starting a Safe Harbor 401(k) comes with a host of benefits for employers. If you’re starting a new plan from scratch (rather than upgrading an existing one), the last day to do so is October 1.

Safe Harbor match plans require you to send Safe Harbor notices (detailing their rights and obligations under the plan) to your employees at least 30 days, but not more than 90 days, before the plan starts.

Note, the last day to adopt Safe Harbor nonelective 3% for existing plans for the 2022 plan year is November 30, 2022. Guideline requires that you request the amendment by November 5, 2022. The plan can also add the nonelective contribution after 12/1 and before 12/31 of the next year if the contribution is at least 4%.

December 1, 2022: Safe Harbor match notices due to employees (for existing plans)

If you’re upgrading your existing 401(k) to a Safe Harbor plan, you’ll need to let employees know 30 days in advance. This can be done even earlier, but not more than 90 days in advance.

Note: This is also the deadline to provide both Qualified Default Investment Alternative and auto-enrollment notices, if your plan has auto-enrollment and/or a QDIA.

December 31, 2022: Deadline for ADP/ACP corrections and retroactive amendments

Although you should be making most compliance corrections before this date, December 31 is the absolute last day you can self-correct ADP/ACP failures to retain qualified status. This includes making corrective distributions to the HCEs, special Qualified Nonelective Contributions to the non-HCEs or both.

December 31, 2022 is also the deadline to adopt discretionary amendments to the plan for 2022.

Here are some additional deadlines for December 31, 2022:

That’s a lot to keep track of. Thankfully, you don’t have to go it alone. From compliance testing to reporting, Guideline handles the hard parts of 401(k) administration so you don’t have to.