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Form 5500 – What is that?

Published by Kim Moore on Mar 29, 2021 6:00:00 AM

Form 5500 Filing Is Required Annually

The Form 5500 is very important to 401(k) plans. It’s a required filing that is completed and filed annually, and it is used by both the Internal Revenue Service (IRS) and Department of Labor (DOL). The Form 5500 is an IRS informational return that provides data to both the IRS and DOL regarding each retirement plan. Most plans are required to complete the Form 5500 and your record-keeper will assist in preparation of the form. If you have specific questions regarding the filing requirement for your plan, it is best to check with your service provider as they will have the information as it relates to your plan. Some key items to understand about the Form 5500 filing are shown below.

  • Timing – If your plan is a calendar year plan, the due date for filing the Form is July 31st of each year. You can receive an automatic extension until October 15th for the plan, but you must file a form with the IRS before the end of July due date to qualify for the extension. It is very important to follow the guidelines regarding filing on time as penalties apply for non-compliance and they are assessed daily from the original due date of the form. If your plan is on a fiscal year basis, the form is due seven months after the year-end date for your plan. The extended date is 10 ½ months from the year-end date.
    Filing Form 5500
  • Data required – The information required is based upon the type of plan, activity that occurred, and the number of participants. If your plan has over 100 eligible participants (this includes those participating in the plan and those employees eligible to participate but have chosen not to), you will be required to file a Long Form 5500, which requires more information and could potentially require an audit. Those with fewer participants can file a Short Form. It is best to verify with your service provider the type of Form required for your situation. The service provider, in most cases, prepares the actual form based upon information they have about the plan but they will provide a questionnaire to you to gather additional required information. Make sure you complete all the requested information requests in a timely manner. If you are unsure of a question that is being asked, verify with your provider before making assumptions.

  • Filing – Once the form has been completed, reviewed, and approved, it must be filed on the DOL E-Fast System. Paper submissions are no longer accepted. Make sure you have fully reviewed the form before submitting it. Ask questions about any items you are unsure of. Keep in mind that once the form is accepted by the system it will become public information. Work with your service provider to complete the filing using their procedures. They should be available for questions as you work through the filing steps. Once you have submitted the form, check back in a few days to make sure the filing was accepted without any errors.

Note: For 2020 plan year filings, the Form 5500, Schedule H, Part III, and Accountant’s Opinion, has been modified to reflect an audit standard change. For most auditors, this will not apply until the 2021 plan years. We are awaiting guidance on the best way to complete this section of the form. Watch this blog space as we will be updating you on this change as soon as the information is available.

The best resource to assist in completing the Form 5500 filing is your representative at the service provider for your plan. If you need specific Form 5500 instructions, click here for Form 5500 instructions from the IRS.

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When it’s time for an audit for your plan, it’s vital that you hire a trusted auditor. At Summit CPA, we specialize in retirement plan audits. We have the ability to offer assistance entirely off-site with little or no distraction to your daily office routine. We also offer flat-fee pricing so there are no surprises on your bill when the job is complete. For assistance, contact our office at (866) 497-9761 to schedule an appointment.

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