I didn’t run payroll for myself last year. Can I still run payroll and get a contribution in for the prior year?

Cash balance plans are for people who are employees on payroll. So if you are in a corporation, you’ll need a W2 to contribute to a plan.

Generally speaking, you can still run payroll even if you are many months late. But payroll taxes were required to be paid on the subsequent payroll to avoid penalties and interest. So for a calendar year payroll, the payroll taxes should’ve been paid in the first week or two in January.

This being the case, you can still run payroll late. But you will have penalties and interest that will likely be more than 50% of the payroll taxes. In addition, these penalties are not tax deductible.

In most situations, running a late payroll does not make sense because the penalties involved usually exceed the benefits from the cash balance plan contribution.

Before you do anything, I would check with your CPA and payroll provider and see what they think and if this is a route you should consider. Setting up a plan for the subsequent year might make more sense.