This article applies to individuals or (the individual and spouse) who are sponsors of one-participant plans and foreign plans. As of January 1, 2021, one-participant plans and foreign plans could file Form 5500-EZ electronically using the DOL’s EFAST2 filing system. The IRS encourages all one-participant plans and foreign plans to e-file their 2020 Forms 5500-EZ.

Abstract: The IRS recently reminded sponsors of one-participant plans and foreign plans that Form 5500-EZ can be filed electronically using the U.S. Department of Labor’s EFAST2 filing system. This article defines these plans and provides further details on e-filing.

One-Participant and Foreign Plans Can File Form 5500-EZ Electronically

In a recent Employee Plans News Alert, the IRS reminded sponsors of one-participant plans and foreign plans that Form 5500-EZ, “Annual Return of A One-Participant (Owners/Partners and Their Spouses) Retirement Plan or A Foreign Plan,” can be filed electronically using the U.S. Department of Labor’s (DOL’s) EFAST2 filing system.

Generally, a one-participant plan or foreign plan that’s required to file an annual return should file Form 5500-EZ. A one-participant plan is a retirement plan (for example, a defined benefit pension plan or a defined contribution profit-sharing or money-purchase pension plan) that:

• Covers only one individual (or an individual and spouse) who own(s) the entire business (which may be incorporated or unincorporated), or
• Covers only one or more partners (or partners and their spouses) in a business partnership, and
• Provides no benefits for anyone other than the individual (or the individual and spouse) or one or more partners (or partners and their spouses).

A foreign plan is a pension plan that’s maintained outside the United States primarily for nonresident aliens. Such a plan is required to file an annual return if the maintaining employer is a:

• Domestic employer, or
• Foreign employer with income derived from sources within the United States (including foreign subsidiaries of domestic employers) if contributions to the plan are deducted on its U.S. income tax return.

As of January 1, 2021, one-participant plans and foreign plans could file Form 5500-EZ electronically using the DOL’s EFAST2 filing system. The IRS encourages all one-participant plans and foreign plans to e-file their 2020 Forms 5500-EZ.

An employer may still file a Form 5500-EZ on paper with the IRS. However, some Form 5500-EZ filers are required to file electronically using EFAST2. If an employer fails to file Form 5500-EZ electronically when required to do so, it will be deemed to have failed to file the return.

One-participant plans and foreign plans can no longer file a Form 5500-SF, “Short Form Annual Return/Report of Small Employee Benefit Plan,” instead of Form 5500-EZ. Contact us for assistance filing the correct forms as well as staying in compliance with tax and retirement plan requirements.

© 2021