LAST REVIEWED Jun 08 2020 8 MIN READ
By The Human Interest Team
Late filings almost always incur penalties with the IRS. Forms 5500, 5500-EZ, and 5530 are no exception. In this article, we discuss how to file for a filing extension with a Form 5558, the limitations of this extension, and mistakes to avoid.
What Is Form 5558?
When employers need more time to file employee plan returns, they need to fill out Form 5558 from the IRS, which gives them an extension of 2 1/2 months. While the form allows for a filing extension, it doesn’t allow for a payment extension. You still need to make associated tax payments while filing the Form 5558, and interest will accrue on unpaid fees. You can use Form 5558 to file an extension for any of the following forms:
Form 5500: Annual return/report of Employee Benefit Plan
Form 5500-SF: Short Form Annual Return/Report of Small Employee Benefit Plan
Form 5500-EZ: Annual Return of One-Participant (Owners and Their Spouses) Retirement Plan
Form 8955-SSA: Annual Registration Statement Identifying Separated Participants with Deferred Vested Benefits
Form 5330: Return of Excise Taxes related to Employee Benefit Plans
You must manually file a separate Form 5558 for each Form 5550 that you need an extension on. However, you automatically receive an extension provided that you filed the forms on time. The IRS may extend the Form 5500 deadline following natural disasters and other catastrophes.
You can also receive an automatic extension if you meet specific conditions and have an extended due date for your income tax returns. Under those circumstances, the extension lasts until the new due date for the federal taxes.
Specific Instructions for Filing Form 5558
Form 5558 is simple to fill out and has clear instructions as part of the document:
Part I – Identification: This section requires either your name, the plan administrator, or the plan sponsor, as well as their address. It should also include your social security number, the employer’s identification number, the plan name and number, and the plan year. If you aren’t a single employer, Part I should identify the plan sponsor and the employer’s EIN. If you don’t have an EIN for Part I, you need to apply for one by filling out Form SS-4 and attaching it to Form 5558.
Part II – Extension of Time to File Form 5500 Series (or Form 8955-SSA): Use this to specify that you are filing for an extension and what your requested extension date is. Note: This date cannot be later than the 15th day of the third month following the initial Form 5500 due date.
Part III – Extension of Time to File Form 5330: This section also requires you to request an extended due date, which must be no later than six months after the initial due date. On line 5, explain why you’re requesting an extension. You must clearly describe the circumstances.
The completed Form 5558 should go to:
Department of the Treasury
Internal Revenue Service Center
Ogden, UT 85201-0045
You need to send the form through the United States Postal Service or a private delivery service that the IRS has designated. These options include:
DHL Express Same Day Service.
FedEx Priority Overnight, FedEx Standard Overnight, FedEx 2 Day, FedEx International Priority, and FedEx International First.
UPS Next Day Air, UPS Next Day Air Saver, UPS 2nd Day Air, UPS 2nd Day Air A.M., UPS Worldwide Express Plus, and UPS Worldwide Express.
Extension of Time to File Form 5500 or Form 5500-EZ
Generally, you need to file one Form 5558 for every delayed Form 5500. However, if you’re a single employer, you can use one Form 5558 to get extensions for several Forms 5500 and 5500-EZ, provided that they have multiple plan years ending on the same date.
You should always keep copies of your Forms 5558 for your records. You should also complete and file the forms before the original due date of the Form 5500 or Form 5500-EZ.
Exceptions in Extension of Time to File Form 5500 or Form 5500-EZ
Filing a Form 5558 isn’t the only way to get an extension on filing Form 5500 or Form 5500-EZ. If your tax year and plan year are the same, then you can get an extension that matches any extension for your federal income tax return. However, if the automatic extension date is past the usual Form 5500 filing deadline, then you should attach a copy of the tax return’s extension as justification. Under these circumstances, you can file a Form 5558 to re-extend the deadline past this extension if the initial Form 5500 due date has passed.
Extension of Time to File Form 5330
Form 5330 can also extend the filing deadline of Form 5330 for up to six months. On line 2 of Form 5558, you can request a specific extension deadline (provide it doesn’t exceed that rule) and include the code for the specific excise taxes you’re requesting a filing extension for on line 3A. An estimate for the tax amount should be on line 2B.
Just like with Forms 5500 and 5500-EZ, a filing extension is not a payment extension.
Include payment when you file any Form 5558. A qualified individual, such as an attorney, must sign the document. You should make out the money orders to the “United States Treasury,” and they must include the employer name, your SSN or EIN, the plan number and year of payment, and the Form 5330 section number. The IRS accepts money orders and checks, but not cash.
However, unlike with Forms 5500 and 5500-EZ, the extensions are not automatic. Instead, the IRS will email you if the extension will occur.
Tips and Warnings for IRS Form 5558
Using false or incorrect information to file for an extension, even accidentally, will nullify the extension. You will then owe a late filing penalty. It’s just as important to perform these three steps correctly:
Use the most up-to-date Form 5558.
Have a qualified signatory sign the document.
Apply for an EIN correctly if you don’t already have one.
Filing tax documentation can be challenging. We’re here to help you manage your plans without the hassle. Contact us today or learn more about our services.
The Human Interest Team
We believe that everyone deserves access to a secure financial future, which is why we make it easy to provide a 401(k) to your employees. Human Interest offers a low-cost 401(k) with automated administration, built-in investment advising, and integration with leading payroll providers.