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Safe Harbor Deadline for New Plans

As we approach year-end, a time when tax-planning becomes forefront, we would like to remind you that the deadline to establish a new Safe Harbor 401(k) plan is October 1st for calendar year end plans. To allow for adequate time to set up the plan, we ask that you let us know by September 15th if you have a client that would like to establish a new Safe Harbor 401(k) plan for the upcoming calendar year.

Employers can choose between two types of safe harbor contributions: a nonelective contribution or a matching contribution.

Nonelective Contribution

The nonelective contribution requires the employer to contribute 3% of each eligible employee’s compensation for the year.

Matching Contribution

Employers can choose a basic or enhanced match formula. A safe harbor matching contribution is allocated only to employees who defer from their own pay to the plan.

  • Basic Match: 100% of the first 3% of pay that is contributed and 50% of the next 2% of pay that is contributed
  • Enhanced Match: 100% of the first 4% of pay that is contributed to the plan

A safe harbor 401(k) plan can provide a variety of benefits to employers. Please contact our office at 209-544-2202 or via email if you have any questions or if you would like to discuss how one of the safe harbor contribution options might be beneficial for your client. 

Thank you for thinking of us during this time for all your Tax-Qualified Retirement Planning needs.

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