Sara Hotvedt

Owner-only plan didn't file 5500-EZ in 2021 or 2022. Is it recommended to file the two late 5500-EZs separate from the timely filed 2023 Form 5500-EZ? It seems to me that filing them all together would make more sense since there wouldn't be a situation where the timely form is processed before the late forms, resulting in correspondence. Thanks for your input.

Thank you both for your comments/responses. I had recommended to the agent that we report the whole amount for 2020 and that we could add a footnote if that made him feel better about reporting the large amount. I'm glad to see my recommendation matched your responses

I am preparing a 5500 for a large welfare benefit plan. The agent has informed me that one of the insurance companies failed to pay them commissions for several years and when this was discovered, they made one large payment of those commissions in 2020. Would you report the entire amount paid on the 2020 Schedule A even though a majority of the amount reported was actually for other Plan Years? I don't see anything in the instructions that address "back" commissions. Thanks!

I have it in my mind that a Schedule A is not required to be attached to a 5500 for a service provider of a welfare benefit plan where the service provider did not pay any fees or commissions to an insurance agent. Am I thinking correctly? Thank you.

I've found that many 403(b) vendors are very difficult to work with when it comes to this type of thing. We've had this problem before, so we had the Plan Sponsor open a checking account in the Plan's name. The additional owed match is deposited into that checking account and then a check is issued (less tax withholding) to the former employee. We (as the TPA) prepare a 1099-R for that distribution after the end of the year. I imagine this would also work for a 401(k) plan.

Thank you!

I have treated these "urgent" notices as a "heads up" that there is no enrollment on file for that person & then I usually just clear out the message from the message board. You will need to make sure that these default invested people receive the QDIA notice annually.

Thank you. I'll discuss with the client. It's not like we charge much to prepare the 5500-EZ, but if they can avoid having to pay the fee unnecessarily, I'll give them that option & make them aware that they could receive a letter from the IRS.

Is it safe to say that if a "solo" 401k plan's assets fall below the $250,000 threshold as of 12/31/2018 & they have filed the 5500-EZ in the past years, they can just stop filing without worrying about receiving correspondence from the IRS? And then they start back up if their assets exceed $250,000 at the end of a future plan year?