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The 2024 calendar year has flown by, and the July 31st deadline for groups with January-December plan years to submit their 2023 5500 filings is now upon us.
Overview of 5500 filings
In general, 5500 filings, which contain details about the finances and operation of group health and retirement plans, are an annual requirement for such plans that had at least 100 participants as of the first day of the plan year. Only active employees enrolled in the plan contribute to the participant count (i.e., spouses, dependents, etc. should be excluded). For groups with wrap plan documents, a filing will be required for all benefits included in the wrap if the participant count for at least one of those benefits satisfies the filing threshold. Groups without wrap plan documents will need to determine on a benefit-by-benefit basis whether they should prepare a filing for that particular benefit.
The filings are due to the IRS and the Department of Labor (DoL) by the last day of the seventh month after the plan year ends. So, while the 5500s for January 2023-December 2023 plans should be submitted by July 31, 2024, the filings for February 2023-January 2024 plans are due by August 31, 2024, March 2023-February 2024 plans need to file by September 30, 2024, etc.
Filing deadlines and requirements
While we always recommend that groups prepare to submit timely filings, there is an extension process available for groups with January-December 2023 plan years that aren’t quite ready to file. To request an extension, employers can file a Form 5558 with the IRS for each 5500 they need more time to prepare. Unlike Forms 5500, which must predominantly be filed electronically, Forms 5558 must be submitted in paper format. As long as the employer files Form 5558 on or before the 5500 deadline, they will be automatically granted an additional two and a half months to submit their 5500(s). Groups with January-December plan years that need more time to prepare their filing should have submitted Form 5558 by July 31, 2024—as long as they do so, they’ll automatically have until October 15, 2024, to file their 2023 Form 5500. For these purposes, the date the mailing is postmarked serves as the submittal date, so groups hoping for an extension still have time to request one if they act quickly. Employers that file for an extension should retain a copy of the request and proof of the mailing (ideally by sending the form(s) via certified mail with return receipt) for their records.
Important considerations for accurate filings
We strongly encourage employers to seek assistance from qualified vendors on their 5500 filings, as the instructions for accurately completing these forms can be complex and filing them inaccurately could trigger an IRS or DoL audit. Here are a few items we recommend employers keep in mind as they work through this process with their preferred 5500 filing vendor:
- It is best practice to maintain proof of filing the Form 5500 (and the extension Form 5558, if applicable), so that evidence is readily available if the IRS and/or DoL ever question the timeliness of a filing.
- If your organization has a wrap plan document, only one 5500 filing is required for all benefits included in the wrap. If your organization does not have a wrap, a separate Form 5500 submission is required for each benefit that meets the filing threshold.
- Ensure that the plan name, employer name, tax ID number, etc., are accurate and consistent among all the filed forms and documents.
- 5500 filings are also required for short plan years, and the same deadline methodology applies even when the plan’s duration is less than 12 months.
- The penalties for failing to file or for filing late without requesting an extension can be more than $2,500 per day—if you find yourself in this position, please take advantage of the DoL’s official Delinquent Filer program to minimize your penalty exposure.
- If you terminate a plan that has been subject to the 5500 filing requirements, don’t forget to submit a final Form 5500 to officially close out the plan.
MZQ is happy to help employers navigate the complexities of 5500 filings. Please reach out to us at engage@mzqconsulting.com if you would like information about our Form 5500 filing service.
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