Form 5500SF Filing Requirements

Technical topics regarding tax preparation.
#1
Posts:
400
Joined:
19-Nov-2014 5:47pm
Location:
USA
Client has a small 401k plan that was funded in 2016, but all assets were removed before 12/31/16. The plan was again funded in 2018.

The plan administrator filed Form 5500SF on behalf of the client for the 2016 and 2018 tax years. The administrator did not file for 2017 and the company received a letter from the IRS.

The plan administrator states that there is no filing requirement for 2017 since the plan had zero assets. I cannot find anything that says this. Anyone know if this is correct?
 

#2
sjrcpa  
Posts:
6471
Joined:
23-Apr-2014 5:27pm
Location:
Maryland
I would have the Plan Administrator reply to the IRS, and hold them responsible for the penalties.
I have never heard of a zero asset = no filing requirement, but I am not an expert.
 

#3
Posts:
1004
Joined:
4-Mar-2015 4:37pm
Location:
San Francisco
Was the plan terminated in 2016? Not understanding how it could be funded in 2016 and have a $0 EOY balance.
 

#4
cdgcc01  
Posts:
1
Joined:
4-Dec-2019 8:04am
Location:
Dubai
The Form 5500-SF, Short Form Annual Return/Report of Small Employee Benefit Plan, is a simplified annual reporting form for use by certain small pension and welfare benefit plans.
File the 2017 Form 5500-SF for plan years that began in 2017. The form and any required schedules and attachments must be filed by the last day of the 7th calendar month after the end of the plan year (not to exceed 12 months in length) that began in 2017. Short Years.
 

#5
Posts:
400
Joined:
19-Nov-2014 5:47pm
Location:
USA
tb_in_sf wrote:Was the plan terminated in 2016? Not understanding how it could be funded in 2016 and have a $0 EOY balance.


After looking at it again...The plan was originally funded with one employee in 2015. The assets were rolled out to another 401k plan in 2016 when the employee left for another job.

The plan was then funded again in 2018 when a new employee started contributing to it. Ending asset balance for 2016 was zero and beginning asset balance for 2018 was zero.
 

#6
HowardS  
Posts:
2819
Joined:
21-Apr-2014 3:12pm
Location:
Southern Pines, NC
I believe you would have to terminate the plan to get around the annual filing. Just an opinion here.
Retired, no salvage value.
 

#7
Doug M  
Posts:
3558
Joined:
22-Apr-2014 1:09pm
Location:
Oregon
Client has a small 401k plan that was funded in 2016


How many employees participating, not counting the owner? Trying to find out if 5500-EZ is applicable for 2017. Then you could use the $250k threshold for non-filing.
Last edited by Doug M on 5-Dec-2019 3:14pm, edited 1 time in total.
 

#8
Posts:
357
Joined:
15-Oct-2017 12:16pm
Location:
California
Just a related question.

Solo 401-k plan. Total value of assets is about $50,000. There is no Form 5500 filing requirement. Is it correct?
 

#9
HowardS  
Posts:
2819
Joined:
21-Apr-2014 3:12pm
Location:
Southern Pines, NC
Correct. Threshold is $250K.
Retired, no salvage value.
 

#10
Posts:
2467
Joined:
24-Apr-2014 7:54am
Location:
Wisconsin
Slight correction to above. Aside from the $250k threshold, Solo 401(k) also needs to file 5500-EZ in year of termination.
 

#11
HowardS  
Posts:
2819
Joined:
21-Apr-2014 3:12pm
Location:
Southern Pines, NC
Good catch.
Retired, no salvage value.
 

#12
Posts:
400
Joined:
19-Nov-2014 5:47pm
Location:
USA
Only one participant in 2016, and one participant in 2018. Different people, but only one participant each year. Owner doesn't participate.
 

#13
HowardS  
Posts:
2819
Joined:
21-Apr-2014 3:12pm
Location:
Southern Pines, NC
Only a one participant 401k plan can file a 5500-EZ. Can a 401k be a one participant plan in 2017 if it wasn't in 2016 and 2018?
A one participant plan is a solo 401k, not for a business with employees and only this type of plan has the $250K filing threshold.
Retired, no salvage value.
 


Return to Taxation



Who is online

Users browsing this forum: Google [Bot], Google Adsense [Bot], GSTaxTalk, HowardS, JoJoCPA, sok454, Terry Oraha and 138 guests