Form 5500: Who Files, Which Version, and When
Form 5500 for small employers: who must file, choosing between 5500, 5500-SF and 5500-EZ, the participant count that triggers an audit, and the penalties.
Form 5500
The annual report every ERISA plan owes the Department of Labor and the IRS. Who has to file, how to pick between the long form, the short form and the one-participant version, the participant count that decides whether you owe an audit, the deadline and the extension, and what a missed filing actually costs
The first time somebody asked whether we had filed our Form 5500, I had to look up what it was. We had a 401(k), we had a recordkeeper, and I had quietly assumed that the recordkeeper handled everything with a form number attached to it.
That assumption is the single most common reason small employers end up with a delinquent filing. The provider usually prepares the report. The employer is the one legally on the hook for filing it, and the daily penalty for not doing so is measured in thousands of dollars rather than hundreds.
This walks through who actually has to file, how to tell which of the three versions applies to you, the participant number that decides whether you owe an accountant audit, the deadline and the extension, and what happens if you have already missed one. I build the people and records tooling for businesses without an HR department at FirstHR, and FirstHR is an onboarding and HR platform rather than a plan recordkeeper or a filing service. This is general information, not legal or tax advice.
What Form 5500 Is
Form 5500 is the annual report an employee benefit plan files to satisfy the reporting requirements of ERISA and the Internal Revenue Code. It is a joint form: the Department of Labor, the IRS and the Pension Benefit Guaranty Corporation all use the same submission.
One point that surprises employers: the filing is public. Anybody can search accepted Form 5500 and 5500-SF reports by employer name and read your participant counts, your asset totals and what you pay your providers. One-participant filings are the exception and are never published online. That transparency is deliberate, and it is why the duty exists under ERISA.
The Department of Labor publishes the forms, instructions and filing system for each plan year (Employee Benefits Security Administration), and the IRS maintains its own guidance for the same form (Internal Revenue Service).
Who Has to File
Retirement plans covered by ERISA file every year regardless of size, with IRA-based arrangements the one large exception. Health and welfare plans file only when they reach the participant threshold or when they hold assets in a trust, so many small employers file for their 401(k) and file nothing for their medical plan.
Plans outside ERISA do not file at all. Governmental plans, most church plans that have not elected coverage, and arrangements maintained solely to comply with state workers compensation or disability law sit outside the requirement entirely. So does a payroll practice such as paying wages during a short absence, because it never becomes a plan.
SEP and SIMPLE IRA arrangements are the exception that matters most to small employers. Neither files a Form 5500: SEPs use the alternative compliance method at 29 CFR 2520.104-48 and 2520.104-49, and for a SIMPLE IRA the financial institution handles the reporting. If that is your retirement benefit, there is no annual report to miss.
The one-participant case is its own category. If the plan covers only the business owner, or an owner and spouse, with no other eligible employees, it uses Form 5500-EZ and only once total assets across all such plans you sponsor exceed $250,000 at the end of the plan year. A final report is required for the year the plan terminates whatever the balance.
Which Version You File
Three versions exist and the plan picks one for you. Most small business retirement plans land on Form 5500-SF, the short form, which is why the term form 5500 for 401k coverage usually describes a filing far shorter than the name suggests.
Eligibility for the short form is narrower than the participant count alone. A plan also has to be free of employer securities, hold assets whose fair value is readily determinable, be eligible for the small plan audit waiver, not be a multiemployer plan, and not be required to file a Form M-1. Miss any one of those and the long form applies even to a very small plan.
How Participants Get Counted
For a defined contribution retirement plan, you count participants with account balances at the beginning of the plan year. That method applies to plan years beginning on or after January 1, 2023, and it replaced a rule that counted everybody eligible to participate whether or not they had ever contributed anything.
| Plan type | Who counts | Measured when |
|---|---|---|
| Defined contribution retirement plan | Participants with an account balance | First day of the plan year |
| Defined benefit plan | Participants covered under the plan, including certain former employees | First day of the plan year |
| Health and welfare plan | Covered employees and former employees, including continuation coverage beneficiaries | First day of the plan year |
| Covered spouses and children | Not counted as separate participants | Not applicable |
| Eligible employees who never enrolled | Excluded for a defined contribution plan under the current method | Not applicable |
The change was quietly one of the most useful pieces of relief small employers have received on this. A business with automatic enrollment and a long roster of tiny balances used to cross the threshold on eligibility alone and inherit an audit it could barely afford. Counting funded accounts moves many of those plans back below the line.
It also means the number moves with participation rather than headcount, so plans that push hard on enrolment through benefits enrollment can approach the threshold faster than expected. That is a good problem, but it is a budget item.
When an Audit Becomes Required
A plan at or above one hundred participants on the first day of the plan year is a large plan, files the long form, and attaches a report from an independent qualified public accountant. Below that count the plan is a small plan and generally qualifies for a waiver of the audit requirement.
The waiver is conditional rather than automatic. At least ninety five percent of plan assets must be qualifying plan assets, broadly those held by regulated institutions such as banks, insurers, broker dealers and registered investment companies, plus participant loans. Where they are not, the person handling the remaining assets must be bonded for at least their value.
Two disclosure conditions come with it. The Summary Annual Report has to name each institution holding qualifying assets and their year end value, and it has to tell participants they may request the institution statements and evidence of any bond at no charge. Skip those and the waiver does not hold.
Health and Welfare Plans
A welfare plan files when it covers at least one hundred participants at the beginning of the plan year, or when it is funded through a trust regardless of size. Otherwise a small welfare plan that is unfunded, fully insured, or a combination of the two is exempt from the annual report.
That exemption is the reason many small employers with medical, dental and life coverage have never filed anything for those benefits. Premiums are paid from the general assets of the business, benefits come exclusively through insurance contracts, and the plan sits under the limited exemption at 29 CFR 2520.104-20.
| Welfare plan situation | Annual report required? |
|---|---|
| Fewer than 100 participants, fully insured, premiums from general assets | No, exempt |
| Fewer than 100 participants, benefits paid from general assets, unfunded | No, exempt |
| Fewer than 100 participants, assets held in a trust | Yes |
| 100 or more participants at the start of the plan year | Yes |
| Health flexible spending arrangement funded by salary reduction | Treated as a welfare plan; count participants and apply the same test |
| Plan subject to the Form M-1 requirement | Yes, the small plan exemption does not apply |
Two practical traps sit inside that table. A trust converts an exempt plan into a filing plan instantly, and a health flexible spending arrangement is a welfare plan in its own right even though nobody thinks of it that way. Both are worth checking against your benefits administration setup once a year rather than once.
The Deadline and the Extension
The report is due the last day of the seventh month after the plan year ends, which is July 31 for a calendar year plan. Filing IRS Form 5558 on or before that date grants an automatic extension of two and a half months, moving the deadline to October 15.
| Obligation | Calendar year plan date | Notes |
|---|---|---|
| Form 5500 or 5500-SF original due date | July 31 | Last day of the seventh month after the plan year ends |
| Form 5558 extension application | On or before July 31 | Automatic when timely; nothing to approve |
| Extended filing deadline | October 15 | Two and a half months beyond the original date |
| Summary Annual Report, no extension | September 30 | Within nine months of the plan year end |
| Summary Annual Report, extended filing | December 15 | Within two months after the extension period closes |
The extension is automatic only if the application is timely. A Form 5558 filed on August 1 for a calendar year plan achieves nothing at all, which is a harsh outcome for a one day slip and a good reason to file the extension early whenever the financial information looks like it might be slow.
The Summary Annual Report is a separate obligation that employers routinely forget because it is not a filing. It is a participant disclosure, it sits alongside your summary plan description duties, and it is due whether or not anybody asks for it.
How the Filing Actually Happens
Forms 5500 and 5500-SF are filed electronically through the Department of Labor filing system, using either approved third party software or the government online tool. There is no paper option for either form.
One-participant plans work slightly differently. Form 5500-EZ may be filed electronically through the same system, and paper filing is available only to sponsors not caught by the IRS electronic filing mandate, which turns on filing at least ten returns of any type during the relevant calendar year.
What Missing It Costs
Two agencies assess separate penalties for the same failure and they stack. The Department of Labor amount is per day with no ceiling, which is what makes an old missed filing so dangerous.
Neither penalty depends on the plan having lost money or on anybody being harmed. The failure is the missing report, and the daily clock keeps running until the report arrives or the agency assesses. A plan that quietly skipped a filing four years ago is theoretically carrying a seven figure exposure on the Department of Labor side alone.
In practice the agencies do not sweep small plans at random, and the realistic trigger is a participant complaint, a plan audit, or the moment somebody in due diligence searches your filing history during a financing round. That is exactly when the number is least convenient.
Fixing a Late Filing
If you have missed a filing and the Department of Labor has not written to you yet, the Delinquent Filer Voluntary Compliance Program is the answer and it is inexpensive. The penalty drops to $10 per day with hard caps that make even several missed years affordable.
| Situation | Cap per report | Cap per plan |
|---|---|---|
| Small plan, one or more delinquent reports | $750 | $1,500 for a submission covering any number of years |
| Large plan, one or more delinquent reports | $2,000 | $4,000 for a submission covering any number of years |
| One-participant plan | Not eligible for the Department of Labor program | Use the IRS relief program instead |
| After the Department of Labor sends a notice of failure to file | Program unavailable | Full penalties apply |
The sequence matters. File the delinquent reports electronically first and mark them as program submissions, then pay the fee through the separate program channel (Delinquent Filer Voluntary Compliance Program). Participation generally carries automatic relief from the IRS penalty as well, which is the second half of the value.
One-participant plans use the IRS program for late filers of the one-participant form instead: a flat $500 per delinquent return, capped at $1,500 per submission for the same plan, and filed on paper because electronically filed delinquent returns are not eligible. Same logic, different door.
Where Small Employers Get It Wrong
Five patterns, and the first one accounts for most delinquent filings I have seen described.
Assuming the recordkeeper files it is the big one. The provider prepares the report and often prepares it beautifully. The plan administrator, which for a small business is usually the employer, is the party that must file and sign.
Filing for the retirement plan and forgetting the welfare plan is second. Once a medical plan crosses the participant threshold or acquires a trust, it owes its own report, and nobody sends a reminder.
Using the old participant counting method is third. Counting everybody eligible rather than everybody with a balance pushes a plan into large plan territory and buys an audit that was never required.
Treating Form 5558 as a formality is fourth. It is automatic only when timely, and there is no relief for filing the extension application a day late.
Waiting to see whether anybody notices a missed year is last, and it is the most expensive instinct on the list given the difference between $750 and a daily penalty with no ceiling. The same instinct shows up around nondiscrimination testing and it costs the same way.
Frequently Asked Questions
Who has to file a Form 5500?
Almost every retirement plan covered by ERISA files an annual report, including a 401(k), a profit sharing plan and a defined benefit plan, regardless of size. SEP and SIMPLE IRA arrangements are the main exception and file nothing. Health and welfare plans file only when they cover at least one hundred participants at the start of the plan year, or when they hold assets in a trust. A welfare plan below that participant count that is unfunded, fully insured, or a combination of the two is exempt under the Department of Labor small plan rule. Plans that ERISA does not reach at all, such as governmental plans and most church plans, do not file. Solo owner plans file the one-participant version once assets pass the threshold.
What is the difference between Form 5500, 5500-SF and 5500-EZ?
They are three versions of the same annual report for three different situations. Form 5500 is the full report, used by large plans and by small plans that cannot meet the short form conditions, and it carries the schedules and any required accountant report. Form 5500-SF is the short form for eligible small plans, with fewer questions and no audit attachment. Form 5500-EZ covers one-participant plans, meaning a business owner or an owner and spouse with no other eligible employees, and is only required once total one-participant plan assets exceed $250,000 at the end of the plan year. You do not choose between them by preference; the plan type and participant count decide.
When is Form 5500 due?
The last day of the seventh month after the plan year ends. For a calendar year plan that is July 31, seven months after the December 31 plan year end. Filing IRS Form 5558 on or before the original due date grants an automatic extension of two and a half months, which moves a calendar year deadline to October 15. The extension is granted automatically when the application is timely, so there is no approval to wait for, but a Form 5558 filed after the original due date does nothing. The Summary Annual Report that goes to participants runs on its own clock, generally within nine months of the plan year end or two months after an extension period closes.
Does a small 401(k) plan need an audit?
Generally no, and the rule changed in a way that helped small employers. For plan years beginning on or after January 1, 2023, a defined contribution plan counts participants with account balances at the beginning of the plan year rather than everyone eligible to participate. A plan that reaches one hundred participants on that basis is a large plan and files with an independent qualified public accountant report attached. Below that it is a small plan and generally qualifies for the audit waiver, provided at least ninety five percent of plan assets are qualifying plan assets or the person handling other assets is bonded, along with specific disclosures in the Summary Annual Report.
What is the penalty for not filing a Form 5500?
Two penalties, and they stack. The Department of Labor may assess up to $2,739 per day for a failure to file, running from the date the report was due, with no statutory maximum. That amount stayed level for 2026 because the annual inflation adjustment was not applied. The IRS separately assesses $250 per day up to $150,000 per return under section 6652(e) of the Internal Revenue Code, as amended by the SECURE Act for returns due after 2019. Because the daily amount never stops accruing on its own, a filing missed several years ago can produce a number that is larger than the plan.
How do you fix a late Form 5500?
Use the Delinquent Filer Voluntary Compliance Program before the Department of Labor contacts you. The program reduces the penalty to $10 per day, capped at $750 for a single late report for a small plan and $1,500 for that plan no matter how many years are submitted together. Large plans are capped at $2,000 per report and $4,000 for the submission. You file the delinquent reports electronically first, flag them as program submissions, then pay the fee separately, and the IRS generally waives its own penalty for participants in the program. One-participant plans are not eligible and instead use the IRS relief program for late filers of the one-participant form, which costs $500 per return up to $1,500.
Do health insurance plans have to file a Form 5500?
Only some of them. A welfare plan with at least one hundred participants at the beginning of the plan year files, and so does any welfare plan funded through a trust regardless of how many people it covers. Below the participant threshold, a plan that is unfunded, fully insured, or a mix of the two is exempt from the annual report under the Department of Labor limited exemption for small welfare plans. Count covered employees and former employees such as continuation coverage beneficiaries; covered dependents are not counted as participants. Many employers use a wrap document so several benefits file as a single plan rather than several.
Who actually prepares and signs the Form 5500?
The plan administrator is legally responsible, and for a small business the plan administrator is usually the employer itself rather than an outside firm. In practice your recordkeeper or third party administrator drafts the report and the financial information, and somebody at the company signs it electronically using credentials registered with the Department of Labor filing system. That division of work causes the most common failure mode: the employer assumes the provider files it, the provider assumes the employer will sign it, and the report sits complete and unfiled while the daily penalty clock runs.