Reminder: July 31 Form 5500 Deadline Wasn't Extended

Although earlier this year the IRS issued COVID-19 relief that extended Form 5500 filing deadlines for some non-calendar-year benefit plans, that relief ended July 15, 2020, and the IRS did not extend filing deadlines for calendar-year plans beyond the normal July 31 due date.

For calendar-year plans, the due date is July 31, with an extension to Oct. 15 for those plan sponsors that file Form 5558, Application for Extension of Time To File Certain Employee Plan Returns, on a timely basis.

"The Form 5500 or Form 5558 extension filing deadline for a 2019 calendar-year plan remains July 31, 2020," law firm Jackson Lewis reminded plan sponsors in an alert. "All other filing deadlines associated with Form 5500 filings for plan years ending after Dec. 31, 2019, are not extended and should be filed timely as in prior years according to the plan year-end date."

Form 5500 and related instructions or, for smaller filers generally with fewer than 100 participants, Form 5500-SF (short form) and instructions are used to report the financial conditions, investments and operations of employee benefit plans. Annual forms are filed for:

• Retirement and savings plans, such as defined-benefit pension plans and 401(k)s or similar defined contribution, profit-sharing and stock bonus plans.
  

• Health and welfare plans, such as medical, dental, life insurance and disability benefit plans.

Typically, the form is due on the last day of the seventh month after the plan year ends—July 31 for calendar-year plans— with an optional two-and-a-half-month extension.

"The past 12 to 18 months have contributed to potential confusion about standard deadlines," Jackson Lewis attorneys Adam Cantor and Kathryn Wheeler noted. For instance, under guidance issued in April 2020, Form 5500 filings for non-calendar-year plans that would otherwise have been due from April 1 until July 14, 2020, were extended to July 15.

That may have led some plan sponsors to believe that the July 31 Form 5500 deadline for calendar-year plans was also extended. Instead, plan sponsors unable to file Form 5500 by the deadline must obtain a regular extension by filing Form 5558 by July 31.

[SHRM members-only HR Q&A: What is Form 5500, and where are instructions for completing it?]

Relief Tied to Extended Tax Return Due Date

There is some deadline relief available for plan sponsors with calendar-year plans, the IRS noted in a July 24 alert.

Plan sponsors will be granted an automatic extension to file Form 5500 through the due date of their federal income tax return, the IRS said.

"If the plan year and the plan sponsor's tax year are the same, and the plan sponsor has been granted an extension of time to file its federal income tax return to a date later than the normal due date for filing the Form 5500," then the Form 5500 would not be due until the extended tax-return due date, the IRS explained.

Electronic Filing

Electronic versions of Form 5500 and related documents are available on the federal government's EFAST2 website, which is also used to file these forms with the IRS.

Administrators or sponsors of employee benefit plans subject to the Employee Retirement Income Security Act must file information about each benefit plan every year. Some plans with fewer than 100 participants are exempt from filing an annual return or report under certain conditions, as detailed in the exempt from filing sections of the forms' instructions.

Penalties

Overlapping penalties for failing to timely file Form 5500 by July 31 (or, with a Form 5558 extension, by Oct. 15) are imposed by the Department of Labor (DOL) and the IRS, the agencies that use the information related to the annual reports. These penalties were increased under the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019.

The DOL's penalties now go up to $2,233 per day with no maximum. The IRS penalty is $250 a day, up to $150,000.

Related SHRM Articles:

Agencies Extend Various Employee Benefit Plan Deadlines, SHRM Online, May 2020

Agencies Preview Form 5500 for Reporting in 2020, SHRM Online, December 2019

[How have you adapted to the pandemic? Share your story with SHRM's Government Affairs team as they educate decision-makers on crafting policies on work, workers and the workplace.]