Increased Penalties for Failure to File Form 5500
The penalty for failure to file 5500 Form series and Form 5310-required by IRC 6058 increased to $250 per day, not to exceed $150,000. The penalty for failure to file a registration statement, Form 8955-SSA, required by IRC 6057(a), increased to $10 for each participant with respect to whom there is a failure to file multiplied by the number of days the failure occurred, not to exceed $50,000 with respect to any plan year. The penalty for failure to file a notification of change of plan status required by IRC 6057(b) increased to $10 for each day during which such failure occurs, not to exceed $10,000.
You cannot submit a Schedule SSA (Annual Registration Statement for Deferred Vested Participants) to EFAST2, even for delinquent or amended filings for plan years prior to 2009. Form 8955-SSA, Annual Registration Statements for Deferred Vested Participants must instead be filed directly with the Internal Revenue Service.
Form 5500 Q & A
What are Effective 5500 Form Filing Instructions?
A recent UBA blog post targeted several questions from their 36,000 employees advised by their independent partner firms. Below is a list of these questions that you might have yourself.
If a health and welfare benefit plan has fewer than 100 participants, then does it need to file a Form 5500?
If a plan is unfunded/self-funded or fully insured, with FEWER than 100 employees, a Form 5500 does NOT need to be filed. However, if the plan is funded, regardless of size, or has 100+ employees, they must file.
When is the filing for Form 5500 Filing?
According to the IRS website, filing should be done the last day of the seventh month of the plan year, so July 31st for calendar-year plans.
What if I know I’m going to miss the deadline?
If for whatever reason you are unable to file in a timely manner, you must file Form 5558 ON OR BEFORE the regular due date (July 31st.) Form 5558 extends the due date 2-1/2 months. You must do this to avoid being penalized.
How do I make sure I file correctly and on time?
HR Service Inc is now offering a Form 5500 filing system, that will take care of the Health and Welfare return, as well as schedules A and C. Contact HR Service for pricing and service details at: 833.685.8400
Can I file 5500-SF Electronically?
Beginning January 1, 2021, you can file the Form 5500-EZ electronically through EFAST2; you can no longer use the Form 5500-SF to electronically file “one-participant” plan and foreign plan annual returns. One-participant plans or foreign plans must file the Form 5500-EZ. If you are not subject to the IRS e-filing requirements, however, you may file a Form 5500-EZ on paper with the IRS.
What is the M-1 Filing System?
The Form M-1 Online Filing System is an electronic filing system for the Form M-1 annual report for multiple employer welfare arrangements. The system allows filers to complete the form and submit it at no cost. This system is an example of an E-Government initiative which uses improved technology to make it easier for citizens and businesses to interact with the government.
What are the most common mistakes when filing Form 5500?
Most common mistakes when filing any 5500 Form are:
- Not fully completing the required information.
- Filing the wrong forms.
- Missing important deadlines.
- Not including the The Proper EIN And Plan Number
- time period entered in Part I of the Form 5500 and Form 5500-SF is not greater than twelve months
- Missing all necessary schedules and attachments
- Improper business codes
- Incorrectly identifying the proper funding and benefit arrangements
- Not filing the correct Financial Information Schedule
- Validating your filing.
What is Form PR?
The Form PR is used to report information for a person or entity that intends to serve as a pooled plan provider to pooled employer plans within the meaning of section 3(43) and 3(44) of the Employee Retirement Income Security Act of 1974 (ERISA) and section 413(e) of the Internal Revenue Code.
When in doubt, it’s best not to do anything on your own when it comes to filing form 5500. You want to make sure that you have people who can help you with this instead.
This is why there are 5500 filing services available today – they help with compliance paperwork and make sure everything is up-to-date. Find out more today by calling or emailing us at solutions@hrserviceinc.com with any questions. Consultations are free.
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