ROBS 401K – Deep Dive Re Form 5500 Filing/Recordkeeping/Annual Compliance (IRS/DOL)

Please check out our webinar reviewing the annual Form 5500 requirement for ROBS 401k plans.

VIDEO SLIDES: ROBS 401K Webinar – A to Z Guide Form 5500

ROBS 401K – What is Form 5500?

  • “Informational” tax return
  • Provides information about the 401k plan
  • Filing the Form 5500 is consistently recognized by the Internal Revenue Service (IRS) and the Department of Labor as of one of the most important compliance requirements applicable to 401k plans.

ROBS 401K – Which Form 5500 to file?

  • Do NOT use 5500-EZ
  • Use Long Form Form 5500
  • Filed with the Department of Labor (not the IRS)
  • Filed electronically via the EFAST

FAQ: Do I have to file if the value is less than $250k?

  • Yes
  • No minimum plan asset value
  • Contrast with $250k minimum for Solo 401k plans

ROBS 401K Form 5500 – What info is reported?

  • Number of Participants
  • Type of business (i.e. business code)
  • Contributions, Rollovers & Distributions
  • Total Value of the Plan Assets (as of the beginning & end of the plan year)
  • Value of Specific Assets in the 401k (NOT business assets)
    • Company Stock (Per Valuation of ROBS C-corporation)
    • 401k Participant Loans
    • Alternative Investments (e.g. real estate, private placements)

ROBS 401K – When is the Form 5500 due?

  • Form 5500 is due seven (7) months after the end of the plan year
    • For 12/31 plan year: 7/31 (or 10/15 if a timely extension is filed)
    • For 6/30 plan year: 1/31 (or 4/15 if a timely extension is filed)
  • Note: May be different than the business tax/fiscal year & not dependent on business C-corp tax return (e.g. Form 1120)

ROBS 401K Form 5500 – Late Filing & Penalties

  • Per the Secure Act, the IRS penalties for late filing increased tenfold (10X) to $250 per day, not to exceed $150,000 per plan year.
    • Note the Department of Labor may also assess penalties
  • Filing under the Department of Labor’s Delinquent Filer Voluntary Correction Program (DFVCP) caps the penalty to $750 for each late Form 5500.

ROBS 401K Final Form 5500 – Closing/Selling
Your Business

  • If you close or sell your business, a Form 5500 will still be required in order to properly wind down the 401k
  • File Final Form 5500 after funds transferred out of the 401k account(s)
    • ROBS C-Corporation sells/liquidates assets and pays back creditors & proceeds distributed to the stockholders including the 401k
    • Rollover 401k funds to an IRA (including issuing a 1099-R)
    • File Final Form 5500

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About George Blower

I have the privilege of educating our clients about our products and services so that they can make informed and confident decisions about their financial future. Prior to joining My Solo 401k Financial, I served as the general counsel for a subsidiary of a Fortune 500 financial services company. Learn more about George Blower and My Solo 401k Financial >>


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