Nonprofit Resources


IRS Extends Deadline for Self-Correction of 403(b) Plan Provisions to June 30

If your nonprofit sponsors a 403(b) retirement plan with provisions that fail to meet Internal Revenue Code (IRC) Section 403(b) requirements, you can correct this by adopting plan amendments. The original deadline for this was March 31, 2020, but the IRS has extended the deadline to June 30, 2020. This applies to both 403(b) pre-approved plans and 403(b) individually designed plans.

This correction may involve adding required provisions or correcting defective provisions. The IRS states that you can do this by taking one of these steps by the deadline:

  • Adopting a 403(b) pre-approved plan with a 2017 opinion or advisory letter
  • Amending your individually designed 403(b) plan

You should also note that:

  • The correction must be retroactive to January 1, 2010, or the plan’s effective date, whichever is later.
  • If the plan was administered based on the incorrect provision, you must retroactively correct this as well.
  • The correction period (known as the remedial amendment period, or RAP) only applies if your organization has adopted a written plan by December 31, 2009, or the effective date of the plan, if that is later. If you do not meet this requirement, you must use the IRS’s Voluntary Correction Program (VCP) to correct the violations.

The original IRS instructions for the program are available here. Original examples of plan provisions and operations that you can self-correct during the RAP or apply to correct under VCP are available on the IRS website.

Please contact us with any questions or to discuss how we can assist with your employee benefit plans. CapinCrouse offers employee benefit plan audit and consulting services, including compliance assessment.

Emily Toler

Emily serves as a partner in the Indianapolis office and as the firm’s Employee Benefit Plan Services Director. Emily has 20 years of experience providing audit and tax services for employee benefit plans, with a primary focus on 403(b) plans. She currently oversees approximately 70 benefit plan audits and related filings. Emily also is a member of the AICPA Employee Benefit Plans Audit Quality Center Executive Committee.

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