The Form 5500 is an annual return/report, filed with the U.S. Department of Labor (DOL), that contains information concerning the qualification of the plan, its financial condition, investments and operations of the plan.
In general, all retirement plans, such as 401(k) and 403(b) plans, must file a Form 5500 for every year the plan holds assets.
Form 5500 due date and extension options
Just as with a personal tax return, you can file an extension for your organization’s Form 5500 annual return/report. The extension provides an additional 2-1/2 months cushion.
For most plans, the Form 5500 is due the last day of the seventh month after the plan year ends, or typically July 31 for a calendar-year plan. If you cannot complete your form by July 31, you will need to file an extension using a Form 5558 with the IRS before July 31 to avoid late filing penalties. Your trusted retirement plan expert should be able to tackle this for you.
Off-calendar plans
If your plan is June 30 year-end and you did not file the Form 5500 return already, you have until July 15, 2020 to do so. Generally, filing deadline for June 30 year-end plans – with extension – is April 15. However, under Notice 2020-23, released April 9, the IRS provided an “automatic” extension until July 15 as a result of the pandemic.
Penalties for non-filing
It is important that you file the Form 5500 and other government forms timely. The late filing fee is $250 per day up to a maximum of $150,000. Additionally, non-filing could “red flag” your plan and can trigger a government audit.
Not able to file the form timely? There is a Delinquent Filer Voluntary Compliance Program (DFVCP) designed to encourage voluntary compliance with the annual reporting requirements. The program gives delinquent plan administrators a way to avoid potentially higher civil penalty assessments by satisfying the program’s requirements and voluntarily paying a reduced penalty amount.
Final words
Sometimes a plan sponsor is unable to file the Form 5500 timely for extenuating circumstances. Certainly, the COVID-19 pandemic doesn’t help. However, it is suggested that you file a Form 5500 anyway, if possible, and later file an amended return with complete and accurate information.
About the Author
A 15-year veteran in all aspects of workplace retirement plan benefits program, Mizan J. Rahman specializes in the compliance, administration, design, and legal documentation of 401(k), 403(b), and 457(b) plans. Mizan provides high-level, personalized consulting to small businesses and not-for-profit organizations. One of the select few to have been awarded Enrolled Retirement Plan Agent (“ERPA”) by the Internal Revenue Service, Mizan regularly represents clients in front of DOL and IRS during audits.
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