Cash Balance Plan Contribution Deadlines for 2025

Cash balance plans allow high-earning business owners to make some of the largest tax-deductible retirement contributions available. But the IRS enforces strict annual deadlines. Missing these dates could mean losing deductions or facing costly penalties.

Here’s a clear breakdown of the 2025 plan year deadlines — including adoption timing, filing extensions, reporting rules, and penalties — so you can plan ahead with confidence.

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Key Deadlines for the 2025 Plan Year

✅ Without Extension

✅ With Extension

📝 Note: Even if your extended business tax return is due October 15, cash balance plan contributions must still be made in full by September 15.

How the Deadlines Work

Establish & Fund by Your Tax Deadline

You must both adopt your cash balance plan and make contributions by your business’s tax-filing deadline.

Extended Final Deadline

If you file Form 7004 (or your entity’s equivalent), you have until September 15, 2026 to open the plan and make your 2025 contributions.

✏️ Hypothetical Example: A sole proprietor who files an extension has until September 15, 2026, to finalize their 2025 cash balance plan contribution. By contrast, without an extension, the deadline is April 15, 2026.

📝 Note: Setting up a plan takes time. Aim to adopt your plan 4–6 weeks before your return deadline to allow for paperwork, actuarial calculations, and IRS filings.

📌 Also read: When Are Taxes Due? Important Deadlines for the 2024 & 2025 Tax Years

Special Adoption Timing for S Corporations

S corporation owners should act earlier than the general deadline.

✅ Best practice: Adopt the plan by December 31, 2025 to ensure your 2025 W-2 wages align with contribution requirements.

❌ Waiting until spring 2026 may leave no time to adjust payroll.

✏️ Hypothetical Example: An S corporation owner who sets up a plan in October 2025 can coordinate payroll to ensure their W-2 reflects the proper income. Someone who waits until February 2026 risks having insufficient reported wages to support their intended contribution.

📝 Note: Early adoption gives more flexibility for both payroll reporting and contribution calculations.

Reporting Contributions on Your Tax Return

When you make 2025 cash balance plan contributions, report them as follows:

📝 Note: Contribution amounts vary by participant age, compensation, and plan design. Always confirm with your actuary or CPA before claiming deductions.

Penalties for Missing Deadlines

Failing to fund your cash balance plan on time can result in serious consequences:

❌ 10% excise tax on the unpaid contribution shortfall.
❌ Must file Form 5330 to report and pay the penalty.
❌ Employer must notify all plan participants if minimum funding requirements are not met.

📝 Note: Penalties reduce the tax advantages of your plan. Mark calendar reminders and coordinate with your actuary well ahead of each deadline to stay compliant.

Next Steps & Conclusion

Cash balance plans can unlock major retirement savings, but only if you meet the IRS deadlines. For the 2025 plan year, the critical dates are:

By adopting your plan early, especially if you’re an S corporation, you can secure accurate W-2 reporting, avoid penalties, and maximize deductions.

📌 Want to learn how much you can contribute? Read our guides below:

Disclaimer:

The Carry Learning Center is operated by The Vibes Company Inc. (“Vibes”) and contains generalized educational content about personal finance topics. While Vibes provides educational content and technology services, all investment advisory services discussed on this website are provided exclusively through its wholly-owned subsidiary, Carry Advisors LLC (“Carry Advisors”), an SEC registered investment adviser. The information contained on the Carry Learning Center should not be construed as personalized investment advice and should not be considered as a solicitation to buy or sell any security or engage in a particular investment, accounting, tax or legal strategy. Vibes is not providing tax, legal, accounting, or investment advice. You should consult with qualified tax, legal, accounting, and investment professionals regarding your specific situation.

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