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ML BeneBits

Contributions to individual retirement accounts (IRAs) for a given year are due by the tax return filing deadline for that year, excluding extensions. For most IRA owners, the deadline for making their 2018 IRA contributions is Monday, April 15, 2019. However, for IRA owners who live in Maine or Massachusetts, the deadline is Wednesday, April 17, 2019.

Why the difference?

Patriot’s Day, an official state holiday in Maine and Massachusetts (where it is called Patriots’ Day), is on the third Monday in April; this year, it falls on April 15. Because it is an official state holiday, residents of these two states would have until the next day (April 16) to make contributions were it not for Emancipation Day. Emancipation Day, an official holiday observed in the District of Columbia, is April 16 (or if April 16 falls on a weekend, the weekday closest to April 16). Federal tax filing deadlines that fall on a legal holiday are satisfied if met on the next business day, and holidays observed in the District of Columbia affect all taxpayers. Thus, Maine and Massachusetts residents have until April 17, 2019 to file their tax returns and make IRA contributions for 2018.

What does this mean for IRA trustees and custodians?

This is not a new occurrence and most IRA trustees and custodians have dealt with this situation before. For good housekeeping, IRA trustees and custodians should take this time to review their communications on making 2018 IRA contributions to reflect the correct deadlines. IRA trustees and custodians should also make sure their IRA documents do not hardwire April 15 as the contribution deadline for all IRA owners regardless of residence, and make sure their IT systems are designed to capture 2018 contributions for IRA owners in Maine and Massachusetts that are made by the April 17, 2019 deadline.