Form 5558 vs Automatic Extension

[TPApril]

We always file Form 5558 if extending a plan's 5500.

However, sometimes, for a variety of reasons, a 5558 is missed, but it is confirmed that they meet the requirements for filing late under an Automatic Extension.

I was curious if there is a trend to not file a 5558 if it is know the Plan Sponsor has filed an Automatic Extension and their fiscal year matches the plan year?

[Peter Gulia]

The Form 5500 Instructions include this: “An extension granted by using this automatic[-]extension procedure [related to “the employer’s” Federal income tax return] CANNOT be extended further by filing a Form 5558[.]” 2025 Instructions for Form 5500 Annual Return/Report of Employee Benefit Plan, “Using Extension of Time To File Federal Income Tax Return”, page 4 right column (emphasis in original), https://www.dol.gov/sites/dolgov/files/ebsa/employers-and-advisers/plan-administration-and-compliance/reporting-and-filing/form-5500/2025-instructions.pdf

Not all extensions that result from an extension of an employer’s tax return get as long an extension as one can get by filing a Form 5558. For example, a calendar-year corporation’s tax-return due date might extend only to mid-September, rather than a calendar plan year’s extension to mid-October.

Filing a Form 5558 sometimes gets a longer time, and even if the Form 5500 due-date extensions are identical often gets greater comfort or convenience about the Form 5500 extended due date. I’m not readily imagining a situation in which the incremental expense of filing Form 5558 outweighs that comfort.

I suspect many practitioners do not deliberately omit a Form 5558 extension. Rather, one resorts to a tax-return extension if a Form 5558 was not filed.

Paul I, do the computer systems allow checking both the “Form 5558” and “automatic extension” boxes for the opening page’s Part I item D?

BenefitsLink mavens, is there more learning on TPApril’s query or this topic?