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Start-up plan in 2020 expected to be a solo(k) plan covering only owner & possibly spouse (who did not work in 2020).  Eligibility is age 21 & 3 months elapsed time, monthly entry dates.  Owner actually hired a part-time employee in July 2020 who became eligible in November, and terminated in December.  Testing determined no contributions were required for this NHCE employee.  So the participant count on 1/1/20 was 1 (owner only) and count on 12/31/20 was 1 (owner only).

Assets were under $250k the entire year.

Does this plan need to file 5500-SF or can they use 5500-EZ and not file for 2020 due to assets under $250k?

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I vote SF too.

Once you have the participant in the plan, you should report 1 terminated participant during the year with less than 100% vested.

Same question in EZ as well but in my opinion, plan is not eligible for EZ.

The question I have is what will happen in 2021 when the plan is eligible only for EZ filing and the assets are under 250K? Hmmm

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If you don't file for 2021, but remember, the client will probably get a letter some time asking where the filing is.  Easily explainable, but still something to keep in mind.

QKA, QPA, CPC, ERPA

Two wrongs don't make a right, but three rights make a left.

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12 hours ago, BG5150 said:

If you don't file for 2021, but remember, the client will probably get a letter some time asking where the filing is.  Easily explainable, but still something to keep in mind.

For this reason, sometimes I think it's better to just keep filing the 5500-SF... even if it's on the DOL public website.  Clients don't generally like letters from the IRS, and neither do I.  And while easily explainable, still gotta do that...

What I don't understand is right under the "year" in the upper right corner of the EZ, are the words "This Form is Open to Public Inspection".  As far as I thought, anyone could get a copy of an EZ from the DOL Public Disclosure Room.  Of course, not as easy to get as online, but still available.

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11 hours ago, chc93 said:

For this reason, sometimes I think it's better to just keep filing the 5500-SF

I would just file the EZ, not the SF.  One participant plans are not allowed to file SFs any more.

QKA, QPA, CPC, ERPA

Two wrongs don't make a right, but three rights make a left.

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