5 Facts about the IRS Program for Small Business Retirement Plans
Small businesses have many time demands. If you missed one or more deadlines for filing your small business retirement plan Form 5500-EZ, you have a small window of time to file these returns without late filing penalties. The deadline for the special penalty relief program is Tuesday, June 2nd. Here are 5 helpful things to know about the program:
- Qualifying plans – Small business retirement plans that qualify for the penalty relief program include: owner-spouse plans, plans of business partnerships (‘one-participant plans’ that cover no other employees than owners or partners) and certain foreign plans.
- Multiple returns – You only need to make one submission to include one or more returns due. All required schedules and attachments must be included.
- No penalty or filing fee – The program is free for qualifying plans.
- Correct labeling of return – Each late return qualifying for the penalty relief program must be marked at the top of the return in red letters: Delinquent return submitted under Rev. Proc. 2014-32, Eligible for Penalty Relief.
- Late filing penalties – If you don’t complete a return, and fail to file the Form 5500 now and in the future, the penalty amount is $25/day, up to $15,000 per return. Also, plan sponsors and plan administrators are subject to civil penalties. Naturally, penalties don’t apply if the plan is able to show reasonable cause for not filing.
Unfortunately, you’re not eligible if you have already been assessed a penalty. This program was designed to help small businesses who are unaware of the filing requirements for retirement plans.
Please contact a Salmon Sims Thomas tax advisor if you have other questions about small business retirement plans and/or filing requirements.