Understanding Form 5500-EZ Filing Requirements

reading time: 26 minute(s)

Every summer, a wave of solo 401(k) owners discover the same thing: their solo 401(k) plan quietly crossed $250,000, and now the IRS wants a return they’ve never heard of: Form 5500-EZ. Below, you can explore what this form is, who has to file it, and IRS compliance details.

Key takeaways

• A final return is required the year the plan terminates, regardless of the asset balance.

• Form 5500-EZ is the annual return for one-participant retirement plans (Solo 401(k)s), owner-only defined benefit plans, and certain foreign plans, filed once combined plan assets exceed $250,000 at year-end.

• The $250,000 test is aggregate: it counts every one-participant plan the owner maintains, not just the one you’re filing for.

• If you’re required to file 10 or more returns of any kind with the IRS in a year, you must e-file this form. Filing on paper risks penalties, and the IRS treats it as not filed at all.

• Late filing penalties run $250 per day, up to $150,000, and the Department of Labor’s late-filer relief program (DFVCP) does not apply to this form.

What is Form 5500-EZ?

Form 5500-EZ is the annual return the IRS requires from one-participant plans and foreign plans that fall outside ERISA’s normal reporting rules. It exists because Forms 5500 and 5500-SF are designed for plans with outside employees and a plan administrator distinct from the owner. A Solo 401(k) has neither, so the IRS built a shorter form specifically for it.

The form reports plan assets, contributions, distributions, and a set of compliance questions, but it does not require the participant-count detail or audit schedules that larger plans file.

Note: A one-participant plan or foreign plan cannot substitute Form 5500 or Form 5500-SF, even if it filed one of those forms in a prior year. Once a plan meets the one-participant definition, Form 5500-EZ is the only correct form.

Who Actually Needs to File

A one-participant plan, for purposes of this form, is a retirement plan (other than an ESOP) that covers only:

• A business owner and, if applicable, their spouse, or
• One or more partners in a partnership and their spouses

and where that individual or group owns the entire business, incorporated or not.

One detail that trips up filers with an S-corporation: an S-corp shareholder who owns 2% or more of the company is treated as a partner under this definition, not as a regular employee. If you’ve structured your business as an S-corp and assumed the ownership stake doesn’t count toward the “one-participant” test, it does.

Foreign plans file too. A foreign plan means a pension plan maintained outside the United States primarily for nonresident aliens, and it has its own filing trigger separate from the asset threshold.

The $250,000 Threshold (the Part People Miss)

Filing kicks in once combined plan assets exceed $250,000 at the end of the plan year. That much is well documented. What’s less discussed is how “combined” is actually defined.

The IRS counts the total assets of every one-participant plan an employer maintains. If you sponsor a Solo 401(k) worth $180,000, and a separate owner-only defined benefit plan worth $90,000, that’s $270,000 combined; neither plan would trigger a filing alone, but combined together, the threshold is met.

The IRS flags this specifically during compliance outreach to financial and investment advisors. 

It’s important to note that once you cross $250,000 and file, you need to file every year after, even if the balance drops beneath the threshold. The obligation doesn’t reset with the balance.

When is Form 5500-EZ due?

The deadline is the last day of the seventh month after the plan year ends. For a calendar-year plan, that’s July 31. A filer can push that out by two and a half months by filing Form 5558 on or before the original due date.

The E-filing Mandate That Changes Everything 

Under Treasury Regulations section 301.6058-2, if a filer is required to file at least 10 returns of any type with the IRS during the calendar year (this includes the first day of the plan year), Form 5500-EZ must be filed electronically through EFAST2.

A small business that issues a few 1099-NECs to contractors, files quarterly 941s, and has a few other information returns can easily clear the 10-return count without realizing it. That’s before considering the 5500-EZ specifically.

Important: Under this mandate, paper-filing is not treated as late or defective filing; it is treated as not filed at all. The only exception is a year-by-year IRS waiver for undue economic hardship, and a filer would need to keep documentation supporting that hardship on file.

Penalties, and Why the Late-Filer Program Won’t Help

The penalty for a late or missing Form 5500-EZ is $250 per day, capped at $150,000 per return. That is known. But the Department of Labor’s Delinquent Filer Voluntary Compliance Program (DFVCP), a standard late-filing relief program, does not cover Form 5500-EZ filers. It’s built for ERISA-covered plans, and one-participant plans fall outside ERISA by definition.

Instead, late Form 5500-EZ filers have a separate path: the IRS penalty relief program under Revenue Procedure 2015-32. To use it, a filer submits a paper Form 5500-EZ along with Form 14704, and pays a $500 fee per late return, capped at $1,500 per plan regardless of how many years are delinquent. This program has to be used on paper even for filers otherwise subject to the e-filing mandate, since it’s a distinct submission process from a standard current-year filing.

The “First Return” Box

When reviewing the compliance of one-participant plans (the Form 5500-EZ First Return Filer Project), the IRS Employee Plans Compliance Unit (EPCU) found a recurring error: sponsors checking the “first return filed for this plan” box on every submission, not just the actual first one.

That box should be checked exactly once, the first time a Form 5500-series return is ever filed for that specific plan. Checking it again in later years flags the return as inconsistent with IRS records and can trigger a compliance letter over something that was never actually a filing gap.

Filing Starts a Clock Most Owners Overlook

Filing Form 5500-EZ does more than satisfy a reporting requirement: it starts the three-year statute of limitations on the IRS’ ability to reassess related taxes or challenge the plan’s qualified status for that year. Without a filed return, that clock never starts, which means the IRS’ window to look back stays open indefinitely for that plan year.

It isn’t a reason to file early out of fear. It’s a reason to file accurately, since an incomplete or incorrect return may not start the clock the way a correct one does.

One privacy detail worth knowing

Form 5500 and Form 5500-SF filings are public record and searchable online. Form 5500-EZ is different: even when filed electronically through EFAST2, the information is not published on the internet. It’s a small but real distinction for owners who assume any 5500-series filing becomes publicly searchable.

Frequently asked questions

1. Do I have to file if my Solo 401(k) is under $250,000?
   No, unless it’s the plan’s final year. Below the threshold, filing is optional, though some owners file anyway to start the statute-of-limitations clock and keep clean records.
   
2. What if I have a Solo 401(k) and a separate defined benefit plan?
   Add the year-end balances of both together. If the combined total exceeds $250,000, both plans are treated as requiring a return, even if either one alone is under the line.
   
3. Can I file Form 5500-EZ on paper?
   Only if you’re not subject to the 10-return e-filing mandate. If you are subject to it, a paper filing is treated as if no return was filed.
   
4. What happens if I never filed and I’m years behind?
   The DFVCP won’t help, since it doesn’t apply to this form. The relevant path is the IRS’s penalty relief program under Revenue Procedure 2015-32, filed on paper with Form 14704 and a per-return fee capped at $1,500 total per plan.
   
5. Do I need to file a final return even if my plan balance is small? Yes. A final Form 5500-EZ is required the year a one-participant plan terminates and distributes all assets, regardless of the balance.
   
6. Can I get an extension using Form 5558?
   Yes. Filing Form 5558 by the original due date (July 31 for calendar-year plans) grants an automatic 2.5-month extension to October 15. No explanation is required. Just make sure the plan sponsor’s name matches your Form 5500-series return exactly, since even a small mismatch is a common rejection reason.

There’s also a lesser-known shortcut that skips Form 5558 entirely: if your plan year matches your business tax year and you already have an approved extension on your federal income tax return, that extension applies automatically to Form 5500-EZ too.

Filing it without the guesswork

The rules above are exactly why solo 401(k) owners and the accountants who file for them tend to outgrow manual paper filing fast: the aggregate-asset test, the 10-return e-filing trigger, and the “first return” checkbox are all easy to get wrong quietly, and the IRS has shown it’s actively checking.

TaxBandits supports Form 5500-EZ e-filing for one-participant and foreign plan filers, with built-in checks designed to catch the errors the IRS flags most often, guided prompts for plan characteristic codes and compliance questions, and a filing record you can access year over year. If your combined plan assets have crossed $250,000, or you’re not sure whether they have, it’s worth checking before July 31 comes around again.