Retroactive first year elective deferrals for sole proprietors

(a) In general Section 401(b)(2) of the Internal Revenue Code of 1986 is amended by adding at the end the following: In the case of an individual who owns the entire interest in an unincorporated trade or business, and who is the only employee of such trade or business, any elective deferrals (as defined in section 402(g)(3)) under a qualified cash or deferred arrangement to which the preceding sentence applies, which are made by such individual before the time for filing the return of such individual for the taxable year (determined without regard to any extensions) ending after or with the end of the plan’s first plan year, shall be treated as having been made before the end of such first plan year.. (b) Effective date The amendment made by this section shall apply to plan years beginning after the date of the enactment of this Act.