Penalties for late filing of Form 5500-EZ

Under the SECURE Act, penalties have increased substantially. Effective for returns that are required to be filed after December 31, 2019, the SECURE Act increased the penalty to $250 per day, not to exceed $150,000 for a late-filed form.

But the penalties don’t stop there. In addition to the IRS penalty, the DOL can assess a civil penalty against a plan sponsor in an amount not to exceed $1,100 per day as a result of failure to timely file Form 5500.

Plan administrators may also face other penalties on incomplete filings unless they submit a statement of reasonable cause for failing to file a complete annual report and the DOL approves it.

This makes proof of mailing extremely important, even if it is mailed well before the deadline.  Be sure to send using certified mail (such as Priority Mail), make sure it’s scanned in at the post office and save a copy of the label/receipt and the tracking history in your files.  Tracking history is usually online for a limited time (several weeks), so it’s best to print it out upon delivery.

As always, if you need any assistance please don’t hesitate to contact our office.