Extended Deadlines for 2020 IRA Contributions

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Deadline extensions for individual tax returns and IRA contributions

April 12, 2021

Because of the recent tax filing deadline extension, your clients have more time to make IRA contributions for the 2020 tax year. On March 29, the Treasury Department issued IRS Notice 2021-21, which extends the income tax return filing and tax payment deadline for individuals from April 15 to May 17, 2021, thereby also extending the deadline for making 2020 IRA contributions to May 17, 2021.1

  • The extension includes individual taxpayers who file their federal income tax returns on one of several forms in the 1040 series that otherwise would be due by April 15, 2021. The Notice clarifies that the tax filing and payment deadline for businesses and any other type of taxpayers who file their federal income tax returns on forms outside of the 1040 series are not extended.
  • The Notice clarifies that the due date for making contributions to IRAs (including Roth IRAs), HSAs, Archer MSAs and Coverdell ESAs for the 2020 tax year is extended to May 17, 2021. The same extension applies for individuals to file Form 5329 to report and pay the 10% additional tax on 2020 distributions from their IRAs and qualified plans.

All 2020 IRA contributions must be postmarked to Athene or picked up by a UPS or FedEx delivery carrier no later than…

  • Traditional, Roth IRAs, HSAs, Archer MSAs and Coverdell ESAs: May 17, 2021
  • SEP IRAs: May 17, 2021 or October 15, 2021, if an extension was filed2

2020 IRA contribution limits:

  • Traditional and Roth IRAs: $6,000 ($7,000 if your clients are age 50 or older), or your clients’ taxable compensation for the year if their compensation was less than the dollar limit.
  • SEP IRAs: $57,000 or 25% of the employee’ salary, whichever is less.

Don’t forget: Be sure to check the minimum premium requirements for the product you’re selling prior to solicitation.

IRA funding requirements:

  • The application or check must clearly indicate “2020” for the contribution year. Otherwise, the contribution will default to 2021.2
  • If the client has written one check for both current and prior year contributions, please make sure the amounts and years are noted in the memo field of the check or in a letter of instruction.
  • If the client has written one check to be split between multiple contracts, please make sure to provide instructions with the check that includes the contract numbers and dollar amounts.
  • Funds must come from a personal account. We cannot accept funds from another carrier or a business account.
  • Personal checks must be from a U.S. Bank with the name and/or address of the owner imprinted on the front of the check.
  • Cashier’s checks must be from the remitter’s U.S. bank and include the name of the owner as remitter.
  • Replacement checks for unacceptable forms of payment must be postmarked to Athene or picked up by a UPS or FedEx delivery carrier no later than May 17, 2021.1
  • Premium may only be applied to an existing annuity if it is a flexible premium annuity that accepts additional premium. Single premium annuities do not accept premium after issue.

Thank you for your business. At Athene, we’re committed to helping take you to the next level.

The above information was prepared by Athene for informational purposes and should not be relied on for legal or tax advice.

1 In response to the severe winter storms, the IRS has extended the income tax return filing deadline to June 15, 2021, for individuals whose principal residence and for businesses whose principal place of business is located in Texas. This extension also extends the deadline for making 2020 IRA contributions for these same Texas taxpayers to June 15, 2021.

2 Please note: For SEP IRAs, Athene will treat all contributions received through October 15, 2021, as 2020 contributions unless noted otherwise somewhere on the check.