5500 Ez

[Guest JEP]

I have found a number of conflicting answers to this question: An S-Corp has 6 owners, only 3 of which are employees. There are no other employees beyond the 3 employers. Can they file on the 5500 EZ?

[Cathy from Chicago]

In my opinion, yes, an EZ may be filed since all employees are owners.

[Belgarath]

I suspect that you will contine to find conflicting answers to this, as the instructions aren't quite as clear on this as one might wish.

However, I'd interpret it the opposite way. This plan is NOT eligible to file an EZ. The instructions do say that it can be filed only for an individual or an individual and spouse that WHOLLY OWN a trade or business, or partners or the partners and spouses in an unincorporated partnership. Your situation is neither. Since this EZ form is for "one participant" plans (including spouses) you can also go to DOL Reg. 2510.3-3 for additional reference.

[Earl]

Seems pretty clear to me that the answer is no. I don't understand why, if it were a Partnership, it would be exempt, but it seems to be the case.

What gives you pause?

Who May File Form 5500-EZ

You may file Form 5500-EZ instead of Form 5500 if you meet ALL of the following conditions:

1. The plan is a one-participant plan. This means that as of the first day of the plan year for which this form is filed, either:

a. The plan only covers you (or you and your spouse) and you (or you and your spouse) own the entire business. (The business may be incorporated or unincorporated); OR

b. The plan only covers one or more partners (or partner(s) and spouse(s)) in a business partnership.

2. The plan meets the minimum coverage requirements of section 410(B) without being combined with any other plan you may have that covers other employees of your business. See the instructions for line 14c for more information.

3. The plan does not provide benefits for anyone except you, or you and your spouse, or one or more partners and their spouses.

4. The plan does not cover a business that is a member of:

a. An affiliated service group,

b. A controlled group of corporations, or

c. A group of businesses under common control.

5. The plan does not cover a business that leases employees. For an explanation of the technical terms above, see Definitions on page 3.