Large Plan/Small Plan - lines 6 and 7f on form 5500

[Guest MJP]

I have a plan that is a large plan for the first time in 2003. On the 2003 5500, line 7f is 99. In my experience, most plans carry the number from line 7f every year to line 6 in the following, so my number in line 6 next year would indicate that they would not need an audit for 2004.

On one hand, carrying the 99 forward to line 6 in 2004 would be consistent as to how their forms have been prepared. On the other, I don't want to tell my client that they don't need an audit if they do. There will be at least one new entrant as of 1/1/04.

Any advice?

[Tom Poje]

line 6 should be 7f plus anyone who entered the first day of the plan year.

but remember, unless this number is greater than 120 you can keep filing the I rather than the H

[Archimage]

If you are only carrying forward the number from last year then you are doing this incorrectly. Your beginning of the plan year number will include participants that enter the plan on 1/1/03. If you have nobody that entered the plan on 1/1/04 then you would not need an audit.