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5500 Reporting: When and How Do I File?

5500-EZ form with pen

5500 reporting, named for – you guessed it -- IRS Form 5500 that is used for this type of filing, is required annually for retirement plans such as 401(k) and profit-sharing plans. However, 5500 reporting doesn’t just pertain to retirement plans. Companies with at least 100 employees are subject to this requirement, along with smaller companies under certain circumstances.

“In my experience, most people know that Form 5500 is required for their retirement plan,” says Ann Myers, a principal with KIG partner 5500 Tax Group. “What I find as the biggest area where non-filing occurs is in the area of health and welfare plans. Many people have no idea that when you have health, dental, vision, life insurance, disability insurance or an FSA plan, you are subject to the same 5500 rules.” 

5500 reporting provides the IRS and Department of Labor (DOL) with important information about the plan’s operation and compliance with government regulations. Fine print: According to the IRS, “the 5500 Series forms satisfy annual reporting requirements under Title I and Title IV of ERISA and the Internal Revenue Code. It is a compliance, research and disclosure tool for the DOL, and a disclosure document for plan participants and beneficiaries. … The series is part of ERISA’s overall reporting and disclosure framework, which is intended to assure that employee benefit plans are operated and managed in accordance with certain prescribed standards.” 

When is it due? 

In what sounds like something out of a passage from the Bible, Form 5500 is due on the last day of the seventh month after the plan year ends. If the plan follows a calendar year, that would be July 31 for the previous year. But if your plan renews on, say, March 1, the form is due by Sept. 30 of that year.

The plan administrator is responsible for electronically signing and filing the report with the DOL through its EFAST2 program. The DOL no longer accepts paper filings, except for Form 5500-EZ (see below). The administrator is also required to keep a copy of Form 5500, including schedules and attachments, with ink signatures on file. 

If you can’t file on time, you can file for a one-time extension by using Form 5558, which affords another 2.5 months. Filing for an extension is important, because both the IRS and DOL can assess penalties and fees for missing the deadline. And these can be steep: $250 per day from the IRS and up to a whopping $2,259 per day by the DOL. Yikes! The extension must be filed on or before the original due date to be valid, Ann warns. It’s worth mentioning that if you do miss the deadline and haven’t filed for an extension, there are penalty-relief programs available.  

Who must file?

  • Large pension plans (more than 100 plan participants)
  • Small pension plans (fewer than 100 participants)
  • Large welfare plans, such as health care plans, (more than 100 participants)
  • Small welfare plans that are "funded" -- a plan where funds are set aside in an account or trust fund for the exclusive benefit of plan participants. 
  • Plans that are subject to the Form M-1 filing requirement, an annual report that must be filed by arrangements that offer health and other benefits to employees of two or more different employers.

Participants include employees and COBRA enrollees, but not dependents.

Who does not have to file?

  • A group health plan with fewer than 100 participants that is either unfunded or fully insured (or a combination of both)
  • Plans that are not subject to ERISA, such as governmental plans, church plans, non-ERISA benefits offered through a cafeteria plan, and some 403(b) plans
  • Plans with voluntary benefits, as long as the plan does not allow employer contributions, does not allow the employer to endorse the plan, and does not allow the employer to receive consideration for collecting and remitting premiums

What information must be provided?

At a glance, here is the information that is required. The good news? There are no fees due with these forms.

  • Name, address and EIN of plan sponsor
  • Name address and EIN of plan administrator
  • Basic plan information (plan name/number, participant counts, plan features, funding and benefit arrangement, effective date, etc.)
  • Actuarial information (DB plans and certain DC plans)
  • Participating employer information
  • Financial information

What form do I use? 

That depends on the size of the plan:

  • Form 5500 is for businesses with 100 or more plan participants. 
  • Form 5500-SF is the short-form version for plans with 100 or fewer participants
  • Form 5500-EZ is designated for plans with only one participant, such as a business owner and their spouse. Assets at the end of the plan year must be at least $250,000. This is the only one of the three that can be filed on paper.

Caveat #1: With 401(k) plans, plan participants include not only those who are actively deferring but those who are eligible to defer. In other words, Ann says, a plan could have 100 participants even if fewer than 100 are actually contributing to a 401(k). 

Caveat #2: The “80-120 rule” allows a 401(k) plan with between 80 and 120 participants on the first day of the plan year to file in the same category (small or large plan) as in the prior year. 

What other forms do I need? 

Which schedules are required to be completed and attached depends, again, on the size of the plan. With some stipulations, large plans must file Schedules H and R and an independent audit report. They may also be subject to Schedules A, C, D and G. Small plans must file Schedules I and R and may be subject to Schedules A, C and D. An independent audit report is generally not required for small plans. 

Common mistakes 

Form 5500 returns can be rejected for a number of reasons such as failing to attach all required schedules and failing to use EFAST2-approved software. For a more comprehensive list of common mistakes from 5500 Tax Group, click here. 

We recognize that there is a lot to know. If you need help with your 5500 reporting, give us a call, and we can guide you in the right direction. While you’re at it, find out what other HR and compliance services we provide. 

Jason Levan

Jason Levan joined Kuzneski Insurance Group in 2021 as Director of Communications and Content after his first career as a newspaper reporter and editor. In Act II, he oversees the content marketing for the company, with the goal of making the insurance world easier to understand and navigate for our clients. When he’s not at work, you can often find him “banging and clanging” in the gym, or spending time with his family.

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