Form 5500‑EZ – $250,000 Threshold, Deadlines, E‑Filing, Penalties

You wear a lot of hats, and filing a retirement plan report is probably not the one you look forward to. Still, if you run a Solo 401(k) or another one‑participant plan, Form 5500‑EZ is how you prove the plan is healthy, compliant, and on time.

In plain terms, you file when your combined year‑end assets cross $250,000, or in any year the plan terminates. File on time, keep clean records, and you will sleep better when the IRS comes calling.

Key Takeaways

• Form 5500‑EZ is the annual return for one‑participant and certain foreign plans, for example Solo 401(k) and owner‑only defined benefit plans.
• You must file when combined one‑participant plan assets exceed $250,000 at plan year end, and you must also file for the final plan year.
• The due date is the last day of the seventh month after plan year end, for calendar‑year plans that is typically July 31. You can extend by up to 2.5 months with Form 5558 filed by the original due date.
• Electronic filing through EFAST2 is generally required, and many filers are now subject to the IRS electronic filing mandate if they file at least 10 federal returns in the year.
• Late filings can trigger steep penalties. Penalty relief may be available through Form 14704 or reasonable cause, so act quickly if you miss a deadline.

What is Form 5500‑EZ

Form 5500‑EZ is the annual return that owner‑only and certain foreign retirement plans file to report plan‑level data, for example assets at year end, contributions, rollovers, loans, and plan features. It satisfies the plan’s reporting duty and creates a clear compliance record.

Think of 5500‑EZ as your plan’s yearly report card. It shows what the plan holds, what went in and out, and whether anything needs attention.

You file for a one‑participant plan when the combined assets across all of your one‑participant plans are above $250,000 at the end of the plan year, and you always file for the plan’s final year. The “combined” point trips people up, since the threshold is not per plan or per account, it is the total across all one‑participant plans you maintain.

Who must file

If you sponsor a one‑participant plan, you are the filer once you hit the threshold or terminate. “One‑participant” includes plans that cover only you, or you and your spouse, if you both own the business, and owner‑only partnerships. SEP‑IRAs are not qualified plans and do not file 5500‑EZ.

One‑participant plans, at a glance

• Your plan covers only you, or you and your spouse, and you both own the entire business, or it covers one or more partners and their spouses.
• You file 5500‑EZ when your combined one‑participant plan assets exceed $250,000 at year end, and for the final plan year even if below the threshold.
• If you filed in a prior year, keep your reporting consistent, especially if you hover near the threshold. This helps maintain a clear compliance trail.

Quick filing posture table

Situation	What you do
Solo 401(k) for you or you and spouse	Monitor year‑end assets, file if over threshold
Combined one‑participant plans under $250,000	No filing required for that year, consider filing if you are close and want clean continuity
Prior‑year filer, now under threshold	Consider continued filing for consistency, and be prepared to file again if markets move
Plan termination	File a final 5500‑EZ for that plan year

How 5500‑EZ filing works today

• Electronic filing, EFAST2. One‑participant plans generally file 5500‑EZ electronically through EFAST2, unless you qualify for a narrow paper exception.
• Mandatory e‑file threshold. If you file at least 10 federal returns in the calendar year that includes the first day of the plan year, you must e‑file 5500‑EZ for plan years beginning on or after January 1, 2024.
• Paper filing. Only if exempt from the e‑file mandate or you have an undue hardship waiver, mail to the IRS Ogden, UT address on the IRS site.

Tip from the trenches, if you try to file a paper return even though you are required to e‑file, the IRS can treat that as not filed. That is a fast path to penalties, so get your EFAST2 credentials in place early.

Where Accountably fits, briefly

When you are juggling close, plan loans, or late rollovers, prep time spikes. Our team can help standardize workpapers, tie out year‑end values, and submit clean, signed EFAST2 filings, so you spend your time on strategy, not chasing documents. We keep this light, since most readers just want to know how to file, but if you need hands‑on help, we can step in where it genuinely saves you time.

The $250,000 threshold, explained

The filing trigger is measured on the last day of your plan year and it looks at the combined assets of all one‑participant plans you maintain. If the total is above $250,000, you file a 5500‑EZ for each one‑participant plan, even those with less than $250,000 individually. For the plan’s final year, you file regardless of balance.

What counts toward assets, think fair market value at year end plus anything the instructions treat as an asset, including participant loans and illiquid holdings like real estate or private notes. Total plan assets include rollovers and unrealized gains or losses that are already reflected in fair value.

Why “combined plans” trips people up

Owners often think the test is per plan or per person. The IRS guidance treats the threshold as a combined total across all your one‑participant plans. Once the combined total exceeds the threshold, you file a 5500‑EZ for each plan.

Practical example

You hold a Solo 401(k) and a small cash balance plan. On December 31, your Solo 401(k) shows $210,000 and the cash balance plan shows $55,000. Your combined owner‑only plan assets are $265,000, so you file a 5500‑EZ for both plans.

When filing is recommended, even if you are close

If you sit near the threshold, a late rollover, year‑end contribution, or a market jump can push you over. Filing conservatively gives you a clean record and removes guessing games. As a bonus, filing starts the typical three‑year clock that applies to these annual returns, which is one more reason to stay timely.

Near‑threshold checklist

• Track December contributions, last‑minute rollovers, and any loan offsets that hit in Q4.
• Get fair market values for illiquid assets early, and document your methods. Keep a copy of appraisals or valuation memos in your workpapers.
• If you previously filed and you hover just under $250,000, consider continued filing for continuity. It keeps your pattern clean for future years.

Determining fair market value, step by step

• Sum the fair market value of every one‑participant plan you and, if applicable, your spouse maintain as of year end. Combine plans for the $250,000 test.
• Include plan assets the instructions list, for example participant loans, and include rollovers that settled by year end.
• Value illiquid positions with a reasonable, supportable estimate and keep the backup in your workpapers.
• If the combined year‑end total is below $250,000, no filing is required for that year, except you must file a final return when the plan terminates.

A quick story from my desk

Late December, a founder rolled over $60,000 from an old 401(k) into a Solo 401(k). He thought he was still under the limit because the rollover landed after Christmas. We caught it while reconciling the year end. The combined balance ended above $250,000, so we filed 5500‑EZs for both owner‑only plans. It took an extra hour that week, and it saved a penalty letter six months later.

Deadlines and extensions

For most one‑participant plans, your due date is the last day of the seventh month after the plan year ends. For calendar‑year plans, circle July 31. If you need more time, file Form 5558 by the original due date and you will usually get up to a 2.5 month extension. Keep a copy of the extension and your proof of submission in the plan files.

Disaster or combat zone relief sometimes postpones deadlines. The DOL and PBGC generally follow IRS announcements, so if your area is affected, check current notices.

Final year returns

If you fully distribute or transfer all plan assets and terminate the plan, you must file a final 5500‑EZ for that year and check the “final return” box. This applies even if the plan balance was under $250,000 before distribution.

Filing methods and tools

Most filers should use EFAST2. You can prepare and submit through the EFAST2 web tool, called IFILE, or EFAST2‑approved software. Register to obtain electronic credentials, then sign and submit electronically. Keep the electronic acceptance and a signed copy in your plan records.

If you are exempt from the mandatory e‑file rules, or you receive an undue hardship waiver, you may mail a paper 5500‑EZ to the IRS Ogden, UT address shown on the IRS site. Otherwise, paper can be treated as not filed, which risks penalties.

Method	Credentials	Tools
EFAST2 electronic	EFAST2 credentials	IFILE web tool
EFAST2 electronic	EFAST2 credentials	EFAST2‑approved software
Paper, only if eligible	Not applicable	Mail to IRS Ogden, UT, per IRS site

Common EFAST2 questions

• Can I still use 5500‑SF instead of 5500‑EZ, no. One‑participant plans should file 5500‑EZ, generally electronically.
• Who signs, the plan administrator or sponsor signs electronically using EFAST2 credentials. Keep the signed copy in your files.
• How do I extend, file Form 5558 by the original due date. You can file electronically where supported, or by mail if you prefer.

Quality control that saves you time

Here is a short prep list that keeps reviews quick and clean.

• Reconcile contributions, rollovers, and loan activity to your provider statements and payroll records.
• Tie the plan year‑end balance to fair market value support, especially for private assets, loans, or real estate.
• Save the EFAST2 acceptance, the confirmation email, and your signed copy in a dated folder. Future you will thank you.

Where Accountably helps, when it actually helps

If your plan holds private assets, participant loans, or you manage more than one one‑participant plan, the documentation can get messy. Our team builds standard workpapers, tags each value to a source, and runs the filing through EFAST2 with proper sign‑offs. If that offloads the painful hours, we are here for it. If your filing is straightforward, the checklists here may be all you need.

Penalties and relief

Missing the deadline can get expensive fast. The IRS penalty often cited is $250 per day, capped at $150,000 per return. If you fall behind, act quickly and evaluate the IRS late‑filer penalty relief program, which uses a fixed fee, commonly $500 per delinquent return up to a cap per submission. Reasonable cause relief is another route, but approval is not guaranteed.

Important detail, late‑filer relief submissions typically require paper returns with Form 14704 on top, mailed to the IRS. Electronically filed delinquent returns may not be eligible for that specific relief path, so follow the program instructions closely.

Why timeliness matters beyond penalties

Timely filing does more than avoid penalties. It also helps start the normal assessment clock that applies to these annual returns, which reduces the period of uncertainty. Late or missing filings can keep the clock open.

Practical tips and common pitfalls

• Confirm the $250,000 test on the last day of the plan year and combine all one‑participant plans you maintain. Many sponsors mistakenly treat the threshold as per plan.
• Include participant loans in total plan assets for the asset line, and disclose outstanding participant loans in the loans section. Keep support for accrued interest.
• Use EFAST2 to e‑file unless a documented exception applies. If you are subject to the electronic filing mandate and you send a paper return, the IRS can treat it as not filed.
• Need more time, submit Form 5558 by the original due date. Keep a copy in your records.
• Terminating the plan, file a final 5500‑EZ and check the final return box, even if the balance was under the threshold before distribution.

Resources and disclaimers

Use official sources when you prepare or review your filing. Start with the IRS “About Form 5500‑EZ” page and the current instructions. For e‑filing mechanics, use the DOL’s EFAST2 FAQ and Quick Start materials. If you need an extension, see the IRS Form 5558 reminders. For late filings, read the IRS penalty relief page and Form 14704 instructions. Filers of Form 5500‑EZ are not eligible for the DOL DFVCP program.

Note, this article focuses on United States rules. Always confirm whether special relief applies to your area if you are affected by a disaster or are serving in a combat zone.

Frequently Asked Questions

What is Form 5500‑EZ

It is the annual return for one‑participant plans and certain foreign plans. You report year‑end assets, contributions, rollovers, loans, participant count, and plan characteristics. Filing on time keeps your plan’s compliance record clean and reduces penalty risk.

What is the difference between 5500‑EZ and 5500‑SF

5500‑EZ is for one‑participant and certain foreign plans. 5500‑SF is for small multi‑participant plans. You should no longer substitute 5500‑SF for 5500‑EZ if you are a one‑participant filer.

What is the exact threshold for filing 5500‑EZ

File when combined one‑participant plan assets exceed $250,000 at plan year end, and always file for the final plan year. Combine all one‑participant plans you maintain for this test.

What is the due date for 5500‑EZ

Your due date is the last day of the seventh month after the plan year ends, for calendar‑year plans that is July 31, and you can extend by 2.5 months using Form 5558 filed by the original due date.

Where do I file if I cannot e‑file

If you qualify for a paper exception or have an undue hardship waiver, mail your 5500‑EZ to the IRS Ogden, UT address shown on the IRS site. Otherwise, use EFAST2 and keep the acceptance in your records.

How do late filers reduce penalties

Use the IRS late‑filer penalty relief program with Form 14704 and paper returns, or request reasonable cause relief. The program uses a fixed fee per delinquent return and a cap per submission for the same plan.