Practice Management
Some Form 5500 filers received relief in April, but not all. And the July 31 Form 5500 deadline looms for calendar-year plans—pandemic or no pandemic.
IRS Notice 2020-23 granted extensions to individuals, trusts, estates, corporations, exempt organizations and other non-corporate tax filers that have a filing or payment deadline falling on or after April 1, 2020, and before July 15, 2020. But the extension did not change the July 31 deadline.
With the Form 5500 deadline now on the horizon, some tips on avoiding Form 5500 errors offered by Laurie C. Wieder, PPC Vice President of 401(k) Solutions in a recent blog entry will come in handy.
And now the stakes are even higher, Wieder reminds—the daily late filing penalty is higher under the SECURE Act. And, she adds, plan fiduciaries and plan sponsors ultimately are on the hook, even if third party administrators prepare the form and often are the ones that submit it.
With the Form 5500 deadline now on the horizon, some tips on avoiding Form 5500 errors offered by Laurie C. Wieder, PPC Vice President of 401(k) Solutions in a recent blog entry will come in handy.
And now the stakes are even higher, Wieder reminds—the daily late filing penalty is higher under the SECURE Act. And, she adds, plan fiduciaries and plan sponsors ultimately are on the hook, even if third party administrators prepare the form and often are the ones that submit it.
Wieder reminds plan fiduciaries and sponsors that they may find it worthwhile to review the Form 5500 before it is sent. To aid in that, she suggestions that they may want to make sure:
- the period the form covers does not exceed one year;
- there is no gap between the last year’s Form 5500 and this year’s;
- the correct business code is entered on the form and that it does not automatically use the code that was entered in the Form 5500 filed last year;
- the data entered on form concerning participants who are active, have balances and are terminated is accurate.;
- the correct plan characteristic codes are entered on the form;
- they understand of the amount required of the plan’s fidelity/ERISA bond;
- no deferrals exceed the annual contributions limit and that all contributions are coded by plan type; and
- all schedules and attachments correctly refer to the name of the plan, employer identification number (EIN) and plan number.
Further, Wieder suggests:
- Review the form as if you had never seen one before, and avoid assumptions about any numbers or data.
- Confirm fidelity/ERISA bond coverage, and answer “yes” to the question on the form regarding whether the plan has such coverage
- A Form 5500 must be filed even for a terminated plan.
- Remember that a plan is not terminated if it is frozen.
- The form must be filed electronically using the EFAST2 or IFILE systems.
- Keep a signed and dated original copy of the filing.
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