Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, in the case of any minimum required contribution for single-employer defined benefit (DB) plans that would have otherwise been due during calendar year 2020, regardless of plan year, the due date has been extended to January 1, 2021. The CARES Act is very specific to the section of the tax code that deals with minimum required contributions, Section 430, and nothing else. As of the writing of this blog post, the tax deductibility and treatment under GAAP accounting are not affected.

Regarding tax deductibility, contributions that are made up until eight and a half months after the end of the plan year can be deducted for the company's prior tax year (assuming the contributions are within the maximum tax deductible limit for that tax year, and assuming the tax year and plan year are the same). This timing is in tandem with the last day to designate contributions for the prior plan year for minimum funding purposes. Under the CARES Act, the due date for any minimum required contribution otherwise due during calendar year 2020 has been extended to January 1, 2021, which may be past eight and a half months after the end of the plan year. However, the CARES Act does not extend the timing for tax deductions. As such, taking advantage of the delayed due date may postpone the tax deduction to the following tax year.

Regarding GAAP accounting, the CARES Act has no bearing. In order for a contribution to be included in the asset value as of the measurement date, the contribution must be deposited into the trust on or before the measurement date. As such, taking advantage of the delayed due date, if delayed past the end of the plan sponsor's fiscal year, will affect the balance sheet position as of the measurement date.

Milliman is not a tax advisor nor an accounting advisor. Therefore, the information above cannot be construed as tax or accounting advice. The tax and/or accounting implications of any delayed contribution should be discussed with a qualified advisor.