IRS Form 5500-EZ Guide: Solo 401(k) Filing Rules & Deadlines

Introduction: What Is IRS Form 5500-EZ?

IRS Form 5500-EZ, titled Annual Return of A One-Participant (Owners/Partners and Their Spouses) Retirement Plan, is an annual informational tax return published by the Internal Revenue Service (IRS). It is governed under Sections 6058 and 6047 of the Internal Revenue Code (IRC).

This form is designed specifically for small business owners, sole proprietors, independent contractors, and business partners who maintain a “one-participant” retirement plan—commonly known as an Individual 401(k), Solo 401(k), or Owner-Only Defined Benefit Plan. Because one-participant plans cover only business owners and their spouses, they are exempt from Title I of the Employee Retirement Income Security Act (ERISA), allowing for this simplified IRS return.

Form 5500-EZ provides the IRS with an annual summary of the plan’s financial health, total contributions, participant loans, asset values, and administrative compliance.

Purpose of the Form

Federal tax law grants significant tax advantages to small business retirement plans, including large pre-tax contribution limits and tax-deferred growth. To protect the tax-qualified status of these plans, the IRS requires annual oversight once retirement assets reach significant balances.

Form 5500-EZ satisfies this statutory requirement without forcing solo entrepreneurs to navigate the complex multi-schedule filings required for large corporate pension plans. It tracks total plan assets, employee salary deferrals, employer profit-sharing contributions, and distributions.

Additionally, the form serves as the official legal record when a one-participant plan is formally terminated and all assets are liquidated to zero.

Who Needs to File This Form

Form 5500-EZ is filed by business owners who sponsor a one-participant retirement plan that meets specific statutory asset or operational triggers. A one-participant plan is a retirement plan that covers only:

• An individual who wholly owns a business (whether incorporated or unincorporated).
• An individual business owner and their spouse.
• One or more partners in a business partnership (and their spouses).

You must file Form 5500-EZ under either of the following mandatory conditions:

• The $250,000 Asset Threshold: The total value of plan assets (combined with any other one-participant plans maintained by your business) exceeded $250,000 at the end of the plan year.
• The Final Plan Year Rule: You formally terminated your one-participant plan and distributed all plan assets during the year, regardless of the asset balance (even if total assets were under $250,000).

Who Is Exempt / Not Required to File

Many solo business owners are exempt from annual Form 5500-EZ reporting. You do not need to file Form 5500-EZ under the following circumstances:

• Assets Under $250,000: Your total one-participant plan assets were $250,000 or less at the end of the plan year, and it is not the final year of the plan.
• Plans Covering Common-Law Employees: If your business employs non-owner, non-spouse employees who are eligible to participate, the plan ceases to be a one-participant plan and must file standard Form 5500 or Form 5500-SF under ERISA.
• SEP and SIMPLE IRAs: Simplified Employee Pensions (SEPs) and SIMPLE IRA plans are exempt from Form 5500-series reporting.
• Individual Traditional & Roth IRAs: Personal IRAs outside of workplace plans do not file Form 5500-EZ.

When to File

Form 5500-EZ follows a fixed annual filing calendar based on the plan year:

• Standard Due Date: Form 5500-EZ must be filed on or before the last day of the 7th month following the end of the plan year (typically July 31st for calendar-year plans ending December 31st).
• Filing Extensions: You can obtain an automatic 2.5-month extension (extending a calendar-year deadline to October 15th) by filing Form 5558 on or before the regular July 31st due date.
• Short Plan Years: For plans operating on a short year (such as the initial or final year of a plan), the due date is the last day of the 7th month after the short plan year ends.

Where and How to File

Plan sponsors have two approved methods for submitting Form 5500-EZ to the government:

• Electronic Filing via EFAST2: You can file Form 5500-EZ electronically through the Department of Labor’s EFAST2 online system or through authorized commercial tax software. Electronic filing provides immediate receipt confirmation.
• Paper Filing by Mail: You can complete a physical paper Form 5500-EZ and mail it directly to the designated IRS address as per the official Form 5500-EZ instructions (Internal Revenue Service, Ogden, UT).

Step-by-Step Instructions to Fill Form 5500-EZ

Form 5500-EZ is a straightforward two-page document divided into five clear parts.

Part / Lines	Key Focus Areas	What to Enter / Select
Part I	Annual Return Identification	Check applicable boxes: first return, amended return, final return (all assets distributed), short plan year, or if filed under an extension (Form 5558).
Part II: Lines 1a – 2c	Plan & Sponsor Information	Enter the official plan name, 3-digit plan number (e.g., 001), date plan established, sponsor legal name, physical address, federal Employer Identification Number (EIN), and contact phone.
Part II: Lines 2d – 3c	Business Code & Administrator	Enter your 6-digit North American Industry Classification System (NAICS) business activity code, and list plan administrator details if different from the sponsor.
Part III: Lines 4a – 5b	Financial Asset Balance	Report total plan assets (cash, investments, loans) and total plan liabilities at the beginning of the year (Column a) and end of the year (Column b).
Part III: Lines 6a – 6c	Annual Contributions Received	Enter total contributions received during the plan year: employer profit-sharing contributions (Line 6a), participant salary deferrals (Line 6b), and rollovers received from other plans (Line 6c).
Part IV: Line 7	Plan Characteristics Codes	Enter specific 2-character and 3-character IRS plan codes (e.g., 2E for a 401(k) feature, 2B for profit-sharing, 3D for a pre-approved prototype plan).
Part V: Lines 8 – 11	Compliance Questions	Answer compliance questions regarding participant loans outstanding, minimum funding standards (for defined benefit plans), and foreign assets.

Understanding the Asset Valuation (Part III)

Lines 4a through 4d track the total market value of your plan. You must include all brokerage accounts, bank accounts, certificates of deposit, real estate held in the plan trust, and the unpaid principal balance of any participant loans outstanding.

Signatures and Certification

The business owner, corporate officer, or plan administrator must sign and date the bottom of page 2 under penalties of perjury. Unsigned paper returns are treated as unfiled by the IRS.

Required Documents and Information Needed Before Filling

Before completing Form 5500-EZ, assemble the following retirement plan and financial records:

• Year-End Account Statements: Brokerage and bank statements showing total plan asset balances as of January 1st and December 31st.
• Contribution Summaries: Accounting records detailing the exact split between employer profit-sharing contributions and employee elective salary deferrals.
• Plan Document & Number: Your signed Solo 401(k) adoption agreement showing the official plan name, adoption date, and 3-digit plan number.
• Participant Loan Statements: Records showing the balance and repayment status of any participant loans taken from the plan.
• Form 5558 Extension Copy: A copy of your extension request if filing after the standard July 31st deadline.

Common Mistakes to Avoid

• Failing to File the Final Return: Assuming that closing a Solo 401(k) with under $250,000 requires no filing. You must check the “Final Return” box and file Form 5500-EZ when liquidating a plan, regardless of the balance.
• Overlooking Combined Plan Balances: Failing to combine the asset balances of multiple one-participant plans (e.g., a Solo 401(k) and a Defined Benefit plan) owned by the same business to check the $250,000 threshold.
• Using Form 5500-EZ with Eligible Employees: Continuing to file Form 5500-EZ after hiring common-law employees who meet eligibility rules. You must transition to Form 5500-SF or Form 5500.
• Using an SSN Instead of an EIN: Entering your personal Social Security Number in Part II instead of the business’s federal Employer Identification Number (EIN).
• Missing the July 31st Deadline: Procrastinating past July 31st without filing a Form 5558 extension, triggering massive automatic late-filing fines.

Penalties and Compliance Risks

Failing to file Form 5500-EZ on time carries some of the steepest statutory penalties in the entire Internal Revenue Code:

• Statutory Daily Penalty: Under IRC Section 6652(e) (as increased by the SECURE Act), the penalty for late filing is $250 per day.
• Maximum Penalty: The late-filing penalty can accumulate up to a maximum of $150,000 per plan year.
• Late Filer Penalty Relief Program: If you missed prior-year Form 5500-EZ filings, you can obtain substantial relief under IRS Revenue Procedure 2015-32. This voluntary correction program allows delinquent filers to submit past-due returns for a fixed penalty fee of $500 per return (capped at $1,500 per plan), avoiding the catastrophic $150,000 statutory fine.

Related Forms and Schedules

When administering a one-participant retirement plan, business owners frequently interact with these related IRS tax forms:

• Form 5558: Application for Extension of Time to File Certain Employee Plan Returns (used to extend Form 5500-EZ by 2.5 months).
• Form 1099-R: Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, etc. (issued to participants when taking distributions or closing the plan).
• Form 5500 / Form 5500-SF: Annual Return/Report of Employee Benefit Plan (used if the business hires common-law employees).
• Form 5330: Return of Excise Taxes Related to Employee Benefit Plans.
• Form 5310: Application for Determination for Terminating Plan.

Frequently Asked Questions (FAQs)

1. What is a “One-Participant Plan”?

A one-participant plan is an employer-sponsored retirement plan (such as a Solo 401(k) or owner-only defined benefit plan) that covers exclusively a business owner, a business owner and their spouse, or business partners and their spouses, with no non-owner employees.

2. If my Solo 401(k) balance is $180,000, do I need to file Form 5500-EZ?

No. As long as your total combined one-participant plan assets remain at or below $250,000 at the end of the plan year, you are exempt from filing Form 5500-EZ (unless it is the final termination year of the plan).

3. Do I have to file Form 5500-EZ if I close my Solo 401(k) with only $50,000?

Yes. The $250,000 filing exemption does not apply to a terminating plan. You must file a final Form 5500-EZ (checking the “Final Return” box in Part I) to report that all plan assets have been distributed to zero.

4. What should I do if I forgot to file Form 5500-EZ for several years?

You should immediately submit your delinquent returns under the IRS Penalty Relief Program (Revenue Procedure 2015-32). This allows you to pay a reduced fee of $500 per late return rather than facing statutory penalties of up to $150,000 per year.

5. Can I file Form 5500-EZ electronically?

Yes. You can complete and submit Form 5500-EZ electronically through the Department of Labor’s EFAST2 online filing portal or through commercial tax software.

6. Can I use Form 5500-EZ if my business hires an employee?

If you hire a non-owner employee who meets statutory plan eligibility requirements (typically age 21 with one year of service), your plan is no longer a one-participant plan. You must begin filing standard ERISA Form 5500 or Form 5500-SF.

Conclusion

IRS Form 5500-EZ is a vital annual compliance filing for self-employed individuals and business owners managing successful Solo 401(k)s and owner-only retirement plans. By providing simplified reporting, it allows entrepreneurs to build substantial tax-sheltered wealth without the administrative overhead of traditional corporate pension plans.

To protect your retirement savings from severe $250-per-day penalties, monitor your total year-end asset balances against the $250,000 threshold, always file a final return when terminating a plan, file on time by July 31st (or submit a Form 5558 extension), and retain complete financial statements in your permanent business records.