Deadlines for IRA Activities and Possible Postponements
By Kristiana Rodriguez
The 2024 tax deadline has passed, but you may still get calls from clients wondering if they’re too late to make a prior-year contribution. Here is a list of deadlines and possible postponements, to help answer your clients' questions.
If a client has received an extension to file his taxes, he may believe that he has an extension to make a prior-year contribution. It is important to understand that a tax filing extension is not an extension to make a prior-year IRA contribution: it is only an extension to file the tax return. But other postponements may apply to some of your clients.
At a Glance. . .
A tax filing extension does not allow IRA owners to make a prior-year contribution after the deadline.
Employers have until their business’s tax return due date, plus extensions, to make SEP and SIMPLE contributions.
Certain individuals affected by federally declared disasters or military personnel serving in a combat zone may have a postponed contribution deadline available for certain tax-related acts.
IRA owners who file their 2024 taxes on time will receive a six-month extension (i.e., October 15, 2025) to recharacterize a contribution or to remove an excess contribution.
Read below for more details on exceptions to the April 15 contribution deadline.
SEP and SIMPLE Employer Contributions
Employers have until their business’ federal tax return due date, including extensions, to deposit employer SEP and SIMPLE IRA contributions. Contributions are reported by the financial organization for the year in which they are received. Employers will designate what year the contribution is for when they file their business’s tax return. For example, if an employer makes a 2024 SEP contribution on March 5, 2025, the financial organization must report the contribution on the 2025 Form 5498, IRA Contribution Information.
Contributions Received by Mail with a Valid April 15 Postmark on the Envelope
2024 prior-year contributions that are received by mail after the contribution deadline generally are considered timely made if the envelope carries a postmark date of on or before the applicable deadline. Financial organizations should keep a copy of the envelope in the client’s file as proof the contribution is timely. The contribution should clearly state it is for 2024 and should be reported on the 2024 Form 5498.
Federally Declared Disaster Postponements
When disaster areas are declared by Federal Emergency Management Agency (FEMA), the IRS issues guidance regarding tax acts that may be postponed, usually in the form of news releases or notices. This is not a change in the due dates, but an available postponement provided to affected taxpayers. “Affected taxpayers” include
individuals who reside in the federally declared disaster area,
individuals who are injured in the disaster area,
individuals who are completing tax-related acts on behalf of those killed in the disaster area,
individuals whose principal place of business is in the disaster area,
relief workers who provide assistance to affected individuals in the disaster area, and
individuals whose tax records are located in the disaster area.
Clients may visit the IRS's tax relief page for the current list of eligible localities and the postponement dates, to see if they are eligible for a postponed tax deadline. Taxpayers should consult with their tax advisor to understand the impact of the deadline relief on their own situation.
Examples of postponed 2024 tax deadlines are shown below.
Alabama, Florida, Georgia, North Carolina and South Carolina: all taxpayers in these states
Alaska: taxpayers in the City and Borough of Juneau
New Mexico: taxpayers in Chaves County
Virginia: taxpayers in Albemarle, Appomattox, Bedford, Bland and Botetourt counties; Bristol City; Buchanan, Buckingham, Carroll and Charlotte counties; Covington City; Craig County; Danville City; Dickenson and Floyd counties; Galax City; Giles, Grayson, Greene, Lee, Madison, Montgomery and Nelson counties; Norton City; Patrick, Pittsylvania and Pulaski counties; Radford City; Roanoke City; Roanoke, Russell, Scott, Smyth, Tazewell, Washington, Wise and Wythe counties
Los Angeles County in California: Individuals and businesses impacted by the January wildfires
Arkansas, Kentucky and Tennessee: All taxpayers in these states
West Virginia: Taxpayers in Boone, Greenbrier, Lincoln, Logan, McDowell, Mercer, Mingo, Monroe, Raleigh, Summers, Wayne and Wyoming counties
Eligible Tax-Related Acts
Eligible taxpayers affected by federally declared disasters may often postpone other actions related to their IRAs. Examples of tax-related acts that may be postponed include the following.
Making IRA contributions
Removing excess IRA contributions
Recharacterizing IRA contributions
Receiving an IRC Sec. 72(t) substantially equal periodic payment
Taking a required minimum distribution (RMD)
Making a qualified disclaimer of inherited assets
Completing rollovers
Postponement Period
The postponement period is a mandatory 60-day period that begins on the earliest “incident date” specified in a FEMA disaster declaration and ends 60 days after the latest incident date. The IRS will announce a deadline relief date that may be longer than the mandatory 60 days. These postponement periods run concurrently.
EXAMPLE: A hurricane batters the coast of Florida for several days. FEMA announces a disaster declaration and specifies that the earliest incident date for the affected counties is August 15. The latest incident date (when the flooding ends) is August 19. The deadline postponement begins on August 15 and ends 60 days from August 19.
While the 60-day postponement period guarantees a minimum time frame to complete certain tax-related acts, the IRS already had the authority under IRC Sec. 7508A to extend any applicable tax-related deadlines for up to one year following presidentially declared disasters, terroristic actions, or military actions. Although the IRS has typically provided 120-day extensions, some have been less.
The mandatory 60-day postponement period will not apply in certain situations. For example, the mandatory postponement period will not apply if FEMA does not state specific incident dates. Instead, the IRS may independently postpone certain tax-related acts for up to one year. Unless the notice or other guidance for a particular disaster provides that the relief is limited, the guidance will generally postpone all of the acts listed in the regulations.
Military Personnel Serving in a Combat Zone
When certain military operations are initiated, the President may issue executive orders designating the relative locations as combat zones or qualified hazardous duty areas. In addition, the Secretary of Defense may designate certain military actions as contingency operations. Members (and their spouses) serving in or affected by these events receive special tax benefits including, among other things, possible postponements for making IRA contributions, filing returns, paying taxes, and filing a refund claim. IRS Publication 3, Armed Forces’ Tax Guide, provides tax information for military personnel and describes any existing combat zone areas. Related information is available on the IRS website.
The deadline is generally extended by 180 days after the last day that the IRA owner served in the area, plus the number of days that remained to complete the tax action for the applicable year when the IRA owner entered the combat zone.
Special Relief for Terrorist Attacks in Israel
Taxpayers who live or have a business in Israel, Gaza, or the West Bank, and certain other taxpayers affected by the October 7, 2023, terrorist attacks in the State of Israel have until Sept. 30, 2025, to file and pay. This includes all 2023 and 2024 returns.
Reporting Postponed Contributions Due to Disaster or Military Service
If an individual affected by a combat zone or disaster area declaration makes a contribution to an IRA after April 15 and designates the contribution for a prior year, the contribution must be reported on Form 5498 either for the year for which the contribution was made or a subsequent year.
If reporting the contribution on Form 5498 for a prior year, financial organizations must include in Boxes 13a through 13c the year for which the contribution was made, the contribution amount, and an indicator code. If there are contributions being made for more than one year, each year’s postponed contribution must be reported on a separate form.
When reporting for a prior year, financial organizations should enter
the contribution amount in Box 13a,
the tax year for which the contribution is made in Box 13b, and
the applicable military operation or event indicator code in Box 13c.
As described in the 2024 reporting instructions, the indicator codes to be used in Box 13c of Form 5498, which are based on which combat zone area applies, or if the individual was affected by a federally-declared disaster, are as follows.
EO13119 (or PL106-21) for Yugoslavia operations area
EO13239 for Afghanistan and associated direct support areas
EO12744 for the Arabian Peninsula areas
PL115-97 for the Sinai Peninsula of Egypt
FD for federally declared disaster area
Recharacterizations and Excess Contribution Removal
If a taxpayer files his tax return timely, the IRS provides an automatic six-month extension to remove an excess contribution or to recharacterize a contribution. The deadline for removing an excess contribution or recharacterizing a 2024 contribution is October 15, 2025.
For more information on removing an excess contribution or processing a recharacterization, visit our articles on the topic.
