1. What is a contribution year change?
2. Why would I request a contribution year change?
3. Tax considerations and reporting
5. Contribution year changes at M1
What is a contribution year change?
A contribution year change allows an IRA contribution to be counted toward a different tax year than the year that was originally selected.
When making a Traditional or Roth IRA contribution, it’s important to pay attention to the tax year that your contribution is being counted toward.
IRA contributions can always be made for the “current year” but may also be made for the “prior” year between January 1 and the tax filing deadline, not including extensions.
|Date of contribution||Contribution year selection|
|January 1- tax filing deadline||Current year or prior year|
|Day after tax filing deadline- December 31||Current year only|
Please note that the tax filing deadline was April 18, 2022.
Why would I request a contribution year change?
If either of these occur, you might consider requesting a contribution year change.
- An error was made when selecting between the current and prior year.
- Your contribution limit has been reached for a tax year.
Tax considerations and reporting
Although contribution year changes are not considered to be taxable events, you'll receive a Form 5498 for each tax year that contributions have been made to your IRA.
If a contribution year change is processed after you have received a Form 5498, an updated form will be sent following the change.
SEP IRA contributions are ineligible for contribution year changes. Contributions to SEP IRAs will always be reported on Form 5498 for the tax year in which they are made.
Contribution year changes must be requested by the second Friday in July. Please request your contribution year change prior to July 1.
Due to the high volume of requests received leading up to this deadline, we can’t guarantee that the changes requested after July 1 will be completed prior to this deadline.
Contribution year changes at M1
The following information is required for a contribution year change at M1:
- Contribution amount needing to be changed
- Date the contribution was made
- Tax year the contribution was originally made for
- New tax year for the contribution
Once our team receives the appropriate information, it usually takes 3 business days to process your contribution year change.
The processing time may increase during periods of high volume, including the time leading up to the request deadline and the tax filing deadline.
M1 is unable to advise if a contribution year change is right for you. Please consult a qualified financial professional with any questions you have about additional tax implications or filing your taxes. We recommend speaking with a qualified financial professional before requesting a contribution year change.
If you have further questions, please contact us.