ფორმა 5330 ინსტრუქცია
ინსტრუქცია ფორმის 5330-ისთვის (რედ. 2021 წლის დეკემბერი)
ინსტრუქცია ფორმა 5330, დასაქმებულთა სასარგებლო გეგმებთან დაკავშირებული აქციზის დაბრ
დაკავშირებული ფორმები
- ფორმა 5330 - ფორმა 5330 (რედ. 2021 წლის დეკემბერი)
Department of the Treasury
Internal Revenue Service
Instructions for Form 5330
Return of Excise Taxes Related to Employee Benefit Plans
(Rev. December 2023)
Section references are to the Internal Revenue Code unless
otherwise noted.
A failure of an applicable plan reducing future benefit
•
accruals to satisfy notice requirements (section 4980F).
Who Must File
Future Developments
For the latest information about developments related to
Form 5330 and its instructions, such as legislation enacted
A Form 5330 must be filed by any of the following.
1. A plan entity manager of a tax-exempt entity who
approves, or otherwise causes the entity to be party to, a
prohibited tax shelter transaction during the tax year and
knows or has reason to know the transaction is a prohibited
tax shelter transaction under section 4965(a)(2).
2. An employer liable for the tax under section 4971 for
failure to meet the minimum funding standards under
section 412.
3. An employer liable for the tax under section 4971(f) for
a failure to meet the liquidity requirement of section 430(j) (or
section 412(m)(5) as it existed prior to amendment by the
Pension Protection Act of 2006 (PPA '06)), for plans with
delayed effective dates under PPA '06.
What’s New
9972) issued in February 2023, any employer or individual
required to file an excise tax return on Form 5330 must file
the excise tax return electronically for tax years ending on or
after December 31, 2023, if the filer is required to file at least
10 returns of any type during the calendar year that the Form
5330 is due. See Regulations section 54.6011-3 for more
information.
4. An employer with respect to a multiemployer plan
liable for the tax under section 4971(g)(2) for failure to comply
with a funding improvement or rehabilitation plan under
section 432.
5. An employer with respect to a multiemployer plan
liable for the tax under section 4971(g)(3) for failure to meet
the requirements for plans in endangered or critical status
under section 432.
Extension. Effective in 2024, Form 8868, Application for
Extension of Time To File an Exempt Organization Return or
Excise Taxes Related to Employee Benefit Plans, is used to
request an extension of time to file Form 5330. If approved,
you may be granted an extension of up to 6 months after the
normal due date of Form 5330. Form 5558, Application for
Extension of Time To File Certain Employee Plan Returns, is
no longer used for an extension of time to file Form 5330.
6. A multiemployer plan sponsor liable for the tax under
section 4971(g)(4) for failure to adopt a rehabilitation plan
within the time required under section 432.
7. A cooperative and small employer charity (CSEC) plan
sponsor liable for the tax under section 4971(h) for failure to
adopt a funding restoration plan within the time required
under section 433(j)(3).
General Instructions
Purpose of Form
File Form 5330 to report the tax on:
A prohibited tax shelter transaction (section 4965(a)(2));
A minimum funding deficiency (section 4971(a) and (b));
A failure to pay liquidity shortfall (section 4971(f));
A failure to comply with a funding improvement or
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•
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8. An employer liable for the tax under section 4972 for
nondeductible contributions to qualified plans.
rehabilitation plan (section 4971(g)(2));
9. An individual liable for the tax under section 4973(a)(3)
because an excess contribution to a section 403(b)(7)(A)
custodial account was made for them and that excess has
not been eliminated, as specified in sections 4973(c)(2)(A)
and (B).
10. A disqualified person liable for the tax under
section 4975 for participating in a prohibited transaction
(other than a fiduciary acting only as such), or an individual or
the individual’s beneficiary who engages in a prohibited
transaction with respect to the individual’s retirement
account, unless section 408(e)(2)(A) or section 408(e)(4)
applies, for each tax year or part of a tax year in the taxable
period applicable to such prohibited transaction.
A failure to meet requirements for plans in endangered or
•
critical status (section 4971(g)(3));
A failure to adopt rehabilitation plan (section 4971(g)(4));
A failure to adopt funding restoration plan
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•
(section 4971(h));
Nondeductible contributions to qualified plans
•
(section 4972);
Excess contributions to a section 403(b)(7)(A) custodial
•
account (section 4973(a)(3));
A prohibited transaction (section 4975);
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•
A disqualified benefit provided by funded welfare plans
(section 4976);
Excess fringe benefits (section 4977);
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•
11. An employer liable for the tax under section 4976 for
maintaining a funded welfare benefit plan that provides a
disqualified benefit during any tax year.
Certain employee stock ownership plan (ESOP)
dispositions (section 4978);
Excess contributions to plans with cash or deferred
•
arrangements (section 4979);
Certain prohibited allocations of qualified securities by an
12. An employer who pays excess fringe benefits and has
•
elected to be taxed under section 4977 on such payments.
ESOP (section 4979A);
13. An employer or worker-owned cooperative, as defined
in section 1042(c)(2), that maintains an employee stock
Reversions of qualified plan assets to employers
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(section 4980); and
Jan 19, 2024
Cat. No. 11871X
ownership plan (ESOP) that disposes of the qualified
securities, as defined in section 1042(c)(1), within the
specified 3-year period (see section 4978).
14. An employer liable for the tax under section 4979 on
excess contributions to plans with a cash or deferred
arrangement, etc.
Form 8868 does not extend the time to pay your
taxes. Any tax due must be paid with this application
for an extension of time to file Form 5330.
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CAUTION
Additionally, interest is charged on taxes not paid by the due
date even if an extension of time to file is granted. See the
instructions for Form 8868.
15. An employer or worker-owned cooperative that made
the written statement described in section 664(g)(1)(E) or
1042(b)(3)(B) and made an allocation prohibited under
section 409(n) of qualified securities of an ESOP taxable
under section 4979A; or, an employer or worker-owned
cooperative who made an allocation of S corporation stock of
an ESOP prohibited under section 409(p) taxable under
section 4979A.
How To File
Electronic filing. An employer or an individual required to
file an excise tax return related to employee benefit plans can
file Form 5330 electronically using the IRS Modernized e-file
filers are encouraged to file Form 5330 electronically
because it is safe, easy to complete, and you have an
immediate record that the return was filed.
Mandatory electronic filing. Under Regulations section
54.6011-3, any employer or individual required to file an
excise tax return on Form 5330 must file the excise tax return
electronically for tax years ending on or after December 31,
2023, if the filer is required to file at least 10 returns of any
type during the calendar year that the Form 5330 is due. See
electronically when required is deemed a failure to file the
return even if the filer submits a paper return.
“Returns” for purposes of these instructions include
information returns (for example, Forms W-2 and Forms
1099), income tax returns, employment tax returns (including
quarterly Forms 941, Employer's Quarterly Federal Tax
Return), and excise tax returns.
On a year-by-year and form-by-form basis, the IRS may
waive the requirement to file Form 5330 electronically in
cases of undue hardship. In certain circumstances, a filer
may be administratively exempt from the requirement to file
electronically. If the IRS's systems do not support electronic
filing, the filer will not be required to file electronically. The
filer should maintain documentation supporting their undue
hardship or other applicable reason for not filing electronically
in the filer's records. For more information about mandatory
electronic filing based on the 10-return threshold, waivers,
and exemptions, see Regulations section 54.6011-3.
16. An employer who receives an employer reversion from
a deferred compensation plan taxable under section 4980.
17. An employer or multiemployer plan liable for the tax
under section 4980F for failure to give notice of a significant
reduction in the rate of future benefit accrual.
A Form 5330 and tax payment is required for any of the
following.
Each year any of the following under Who Must File,
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earlier, apply: (1), (2), (3), (5), (6), (7), (8), (9), (10), (11), (12),
(13), (14), or (16).
Each failure of an employer to make the required
•
contribution to a multiemployer plan, as required by a funding
improvement or rehabilitation plan under section 432.
A reversion of plan assets from a qualified plan taxable
•
under section 4980.
Each year or part of a year in the taxable period in which a
•
prohibited transaction occurs under section 4975. See the
instructions for Schedule C, line 2, columns (d) and (e), for a
definition of “taxable period.”
When To File
File one Form 5330 to report all excise taxes with the same
filing due date. However, if the taxes are from separate plans,
file separate forms for each plan.
Generally, filing Form 5330 starts the statute of limitations
running only with respect to the particular excise tax(es)
reported on that Form 5330. However, statutes of limitations
with respect to the prohibited transaction excise tax(es) are
based on the filing of the applicable Form 5500, Annual
Return/Report of Employee Benefit Plan.
Paper forms for filing. Form 5330 can be filed on paper if a
filer is not subject to the electronic filing requirement under
Regulations section 54.6011-3. The official IRS printed Form
5330 can be found on the IRS website and downloaded to
your computer to print and sign before mailing to the address
specified in these instructions. See Where To File below. You
can complete paper Form 5330 by hand with pen or
typewriter using only blue or black ink. Entries should not
exceed the lines provided on the form. You can find Form
5330 and its instructions by visiting the IRS Internet website
Use Table 1 to determine the due date of Form 5330.
Extension. Effective in 2024, a filer must use Form 8868,
Application for Extension of Time To File an Exempt
Organization Return or Excise Taxes Related to Employee
Benefit Plans, to request for an extension of time to file Form
5330. You may be granted an extension of up to 6 months
after the normal due date of Form 5330 if Form 8868 is filed
on or before the normal due date (not including any
Where To File
File the paper Form 5330 at the following address:
extensions) of the return. Form 5558, Application for
Extension of Time To File Certain Employee Plan Returns, is
no longer used for an extension of time to file Form 5330.
You must file a separate Form 8868 for each excise tax
that has a different filing due date for the Form 5330.
However, you can file one Form 8868 if each excise tax on
the Form 5330 has the same filing due date.
Department of the Treasury
Internal Revenue Service Center
Ogden, UT 84201
Note. If an employer or individual required to file the Form
5330 fails to file the return electronically when required to do
so, the filer is considered not to have filed the return even if
the filer submits a paper return. See Regulations section
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Instructions for Form 5330
Table 1. Excise Tax Due Dates
IF the taxes are due under
section . . .
THEN file Form 5330 by the . . .
15th day of the 5th month following the close of the entity manager's tax year during which the
tax-exempt entity becomes a party to the transaction.
4965
4971
15th day of the 10th month after the last day of the plan year.
15th day of the 10th month after the last day of the plan year.
15th day of the 10th month after the last day of the plan year.
15th day of the 10th month after the last day of the plan year.
15th day of the 10th month after the last day of the plan year.
15th day of the 10th month after the last day of the plan year.
4971(f)
4971(g)(2)
4971(g)(3)
4971(g)(4)
4971(h)
4972
last day of the 7th month after the end of the tax year of the employer or other person who must file this
return.
4973(a)(3)
4975
last day of the 7th month after the end of the tax year of the individual who must file this return.
last day of the 7th month after the end of the tax year of the employer or other person who must file this
return.
4976
4977
4978
4979
4979A
last day of the 7th month after the end of the tax year of the employer or other person who must file this
return.
last day of the 7th month after the end of the calendar year in which the excess fringe benefits were
paid to your employees.
last day of the 7th month after the end of the tax year of the employer or other person who must file this
return.
last day of the 15th month after the close of the plan year to which the excess contributions or excess
aggregate contributions relate.
last day of the 7th month after the end of the tax year of the employer or other person who must file this
return.
4980
last day of the month following the month in which the reversion occurred.
last day of the month following the month in which the failure occurred.
4980F
If the filing due date falls on a Saturday, Sunday, or legal holiday, the return may be filed on the next business day.
301.6651-1 for more information relating to the failure to file a
tax return.
Private delivery services (PDSs). You can use certain
private delivery services (PDSs) designated by the IRS to
meet the “timely mailing as timely filing/paying” rule for tax
of designated services.
failure to file a tax return, starts from the due date or
extended due date of the return. Interest rates are variable
and may change quarterly. (See section 6601.)
Penalty for late filing of return. If you do not file a return by
the due date, including extensions, you may have to pay a
penalty of 5% of the unpaid tax for each month or part of a
month the return is late, up to a maximum of 25% of the
unpaid tax. The penalty will not be imposed if you can show
that the failure to file on time was due to reasonable cause. If
you file late, you may attach a statement to Form 5330
explaining the reasonable cause.
Penalty for late payment of tax. If you do not pay the tax
when due, you may have to pay a penalty of 1/2 of 1% of the
unpaid tax for each month or part of a month the tax is not
paid, up to a maximum of 25% of the unpaid tax. The penalty
will not be imposed if you can show that the failure to pay on
time was due to reasonable cause.
The PDS can tell you how to get written proof of the
mailing date.
For the IRS mailing address to use if you're using a PDS,
Private delivery services cannot deliver items to P.O.
boxes. You must use the U.S. Postal Service to mail
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CAUTION
any item to an IRS P.O. box address.
Interest and Penalties
Interest and penalties for late filing and late payment will
Interest. We are required by law to charge interest when you
do not pay your liability on time. Generally, we calculate
interest on any unpaid balance from the due date of your
return (regardless of extensions of time to file) until you pay
the amount you owe in full, including accrued interest and
any penalty charges. Interest on some penalties accrues on
any unpaid balance from the date we notify you of the penalty
until it is paid in full. Interest on other penalties, such as
be billed separately after the return is filed.
Claim for Refund or Credit/Amended Return
File an amended Form 5330 for any of the following.
To claim a refund of overpaid taxes reportable on Form
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5330.
To receive a credit for overpaid taxes.
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3
Instructions for Form 5330
To report additional taxes due within the same tax year of
If the plan has a foreign address, enter the information in
the following order: city or town, state or province, and
country. Follow the country's practice for entering the postal
code. Do not abbreviate the country name.
Item E. Plan sponsor's EIN. Enter the nine-digit EIN
assigned to the plan sponsor. This should be the same
number used to file the Form 5500 series return/report.
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the filer if those taxes have the same due date as those
previously reported. Check the box in item H of the Entity
Section and report the correct amount of taxes on
Schedule A through L, as appropriate, and on Part I, lines 1
through 16. See the instructions for Part II, lines 17 through
19.
If you file an amended return to claim a refund or credit,
the claim must state in detail the reasons for claiming the
refund. In order for the IRS to promptly consider your claim,
you must provide the appropriate supporting evidence. See
Regulations section 301.6402-2 for more details.
Item F. Plan year ending. “Plan year” means the calendar
or fiscal year on which the records of the plan are kept. Enter
eight digits in month/date/year order. This number assists the
IRS in properly identifying the plan and time period for which
Form 5330 is being filed. For example, a plan year ending
March 31, 2022, should be shown as 03/31/2022.
Specific Instructions
Item G. Plan number. Enter the three-digit number that the
employer or plan administrator assigned to the plan. This
three-digit number is used with the EIN entered on item B
and is used by the IRS, the Department of Labor, and the
Pension Benefit Guaranty Corporation as a unique 12-digit
number to identify the plan.
Filer tax year. Enter the tax year of the employer, entity, or
individual on whom the tax is imposed by using the plan year
beginning and ending dates entered in Part I of Form 5500 or
by using the tax year of the business return filed.
Item A. Name and address of filer. Enter the name and
address of the employer, individual, or other entity who is
liable for the tax.
Include the suite, room, or other unit number after the
street number. If the post office does not deliver mail to the
street address and you have a P.O. box, show the box
number instead of the street address.
If the plan has a foreign address, enter the information in
the following order: city or town, state or province, country,
and ZIP or foreign postal code. Follow the country's practice
for entering the postal code. Do not abbreviate the country
name.
If the plan number is not provided, this will cause a
delay in processing your return.
!
CAUTION
Item H. Amended return. If you are filing an amended Form
5330, check the box on this line, and see the instructions for
Part II, lines 17 through 19. Also, see Claim for Refund or
Credit/Amended Return, earlier.
Filer's signature. To reduce the possibility of
correspondence and penalties, please sign and date the
form. Also, enter a daytime phone number where you can be
reached.
Preparer's signature. Anyone who prepares your return
and does not charge you should not sign your return. For
example, a regular full-time employee or your business
partner who prepares the return should not sign.
Generally, anyone who is paid to prepare the return must
sign the return in the space provided and fill in the Paid
Preparer's Use Only area. See section 7701(a)(36)(B) for
exceptions.
Item B. Filer's identifying number. Enter the filer's
identifying number in the appropriate section. The filer's
identifying number is either the filer's employer identification
number (EIN) or the filer's social security number (SSN), but
not both. The identifying number of an individual, other than a
sole proprietor with an EIN, is the individual’s SSN. The
identifying number for all other filers is their EIN. The EIN is
the nine-digit number assigned to the plan sponsor/employer,
entity, or individual on whom the tax is imposed.
In addition to signing and completing the required
information, the paid preparer must give a copy of the
completed return to the taxpayer.
Item C. Name of plan. Enter the formal name of the plan or
enough information to identify the plan.
This should be the same name indicated on the Form
5500 series return/report if that form is required to be filed for
the plan.
Note. If Form 5330 is filed on paper, a paid preparer may
sign original or amended returns by rubber stamp,
mechanical device, or computer software program.
Item D. Name and address of plan sponsor. The term
Part I. Taxes
“plan sponsor” means:
1. The employer, for an employee benefit plan
Line 4. Enter the total amount of the disqualified benefit
under section 4976. Section 4976 imposes an excise tax on
employers who maintain a funded welfare benefit plan that
provides a disqualified benefit during any tax year. The tax is
100% of the disqualified benefit.
established or maintained by a single employer.
2. The employee organization, in the case of a plan of an
employee organization.
3. The association, committee, joint board of trustees, or
other similar group of representatives of the parties who
establish or maintain the plan, if the plan is established or
maintained jointly by one or more employers and one or more
employee organizations, or by two or more employers.
Generally, a disqualified benefit is any of the following.
Any post-retirement medical benefit or life insurance
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benefit provided for a key employee unless the benefit is
provided from a separate account established for the key
employee under section 419A(d).
Include the suite, room, or other unit number after the
street number. If the post office does not deliver mail to the
street address and you have a P.O. box, show the box
number instead of the street address.
Any post-retirement medical benefit or life insurance
•
benefit unless the plan meets the nondiscrimination
requirements of section 505(b) for those benefits.
Any portion of the fund that reverts to the benefit of the
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employer.
4
Instructions for Form 5330
3. The accrual or allocation of S corporation shares in an
ESOP during a nonallocation year constituting a prohibited
allocation under section 409(p).
Lines 5a and 5b. Section 4978 imposes an excise tax on
the sale or transfer of securities acquired in a sale or qualified
gratuitous transfer to which section 1042 or section 664(g)
applied, respectively, if the sale or transfer takes place within
3 years after the date of the acquisition of qualified securities,
as defined in section 1042(c)(1) or a section 664(g) transfer.
The tax is 10% of the amount realized on the disposition of
the qualified securities if an ESOP or eligible worker-owned
cooperative, as defined in section 1042(c)(2), disposes of the
qualified securities within the 3-year period described above,
and either of the following applies.
4. A synthetic equity owned by a disqualified person in
any nonallocation year.
Prohibited allocations for ESOP or worker-owned
cooperative. For purposes of items 1 and 2 above, a
“prohibited allocation of qualified securities by any ESOP or
eligible worker-owned cooperative” is any allocation of
qualified securities acquired in a nonrecognition-of-gain sale
under section 1042, which violates section 409(n), and any
benefit that accrues to any person in violation of
section 409(n).
Under section 409(n), an ESOP or worker-owned
cooperative cannot allow any portion of assets attributable to
employer securities acquired in a section 1042 sale to accrue
or be allocated, directly or indirectly, to the taxpayer, or any
person related to the taxpayer, involved in the transaction
during the nonallocation period. For purposes of
section 409(n), “relationship to the taxpayer” is defined under
section 267(b).
The total number of shares held by that plan or cooperative
•
after the disposition is less than the total number of employer
securities held immediately after the sale; or
Except to the extent provided in regulations, the value of
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qualified securities held by the plan or cooperative after the
disposition is less than 30% of the total value of all employer
securities as of the disposition (60% of the total value of all
employer securities in the case of any qualified employer
securities acquired in a qualified gratuitous transfer to which
section 664(g) applied).
See section 4978(b)(2) for the limitation on the amount of
The nonallocation period is the period beginning on the
tax.
date the qualified securities are sold and ending on the later
of:
The section 4978 tax must be paid by the employer or the
eligible worker-owned cooperative that made the written
statement described in section 1042(b)(3)(B) on dispositions
that occurred during their tax year.
The section 4978 tax does not apply to a distribution of
qualified securities or sale of such securities if any of the
following occurs.
10 years after the date of sale, or
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The date on which the final payment is made if acquisition
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indebtedness was incurred at the time of sale.
The employer sponsoring the plan or the eligible
worker-owned cooperative is responsible for paying the tax.
For purposes of items 3 and 4, under Line 6, earlier, the
excise tax on these transactions under section 4979A is 50%
of the amount involved. The amount involved includes the
following.
The death of the employee.
•
The retirement of the employee after the employee has
•
reached age 591/2.
The disability of the employee (within the meaning of
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1. The value of any synthetic equity owned by a
disqualified person in any nonallocation year. “Synthetic
equity” means any stock option, warrant, restricted stock,
deferred issuance stock right, or similar interest or right that
gives the holder the right to acquire or receive stock of the S
corporation in the future. Synthetic equity may also include a
stock appreciation right, phantom stock unit, or similar right to
a future cash payment based on the value of the stock or
appreciation; and nonqualified deferred compensation as
described in Regulations section 1.409(p)-1(f)(2)(iv). The
value of a synthetic equity is the value of the shares on which
the synthetic equity is based or the present value of the
nonqualified deferred compensation.
section 72(m)(7)).
The separation of the employee from service for any
•
period that results in a 1-year break in service, as defined in
section 411(a)(6)(A).
For purposes of section 4978, an exchange of qualified
securities in a reorganization described in section 368(a)(1)
for stock of another corporation will not be treated as a
disposition.
For section 4978 excise taxes, the amount entered
on Part I, line 5a, is the amount realized on the
disposition of qualified securities, multiplied by 10%.
Also, check the appropriate box on line 5b.
2. The value of any S corporation shares in an ESOP
accruing during a nonallocation year or allocated directly or
indirectly under the ESOP or any other plan of the employer
qualified under section 401(a) for the benefit of a disqualified
person. For additional information, see Regulations
section 1.409(p)-1(b)(2).
Line 6. Section 4979A imposes a 50% excise tax on
allocated amounts involved in any of the following.
1. A prohibited allocation of qualified securities by any
ESOP or eligible worker-owned cooperative.
2. A prohibited allocation described in
section 664(g)(5)(A). Section 664(g)(5)(A) prohibits any
portion of the assets of the ESOP attributable to securities
acquired by the plan in a qualified gratuitous transfer to be
allocated to the account of:
3. The total value of all deemed-owned shares of all
disqualified persons.
For purposes of determining a nonallocation year, the
attribution rules of section 318(a) will apply; however, the
option rule of section 318(a)(4) will not apply. Additionally, the
attribution rules defining family member are modified to
include the individual's:
a. Any person related to the decedent within the meaning
of section 267(b) or a member of the decedent's family within
the meaning of section 2032A(e)(2); or
b. Any person who, at the time of the allocation or at any
time during the 1-year period ending on the date of the
acquisition of qualified employer securities by the plan, is a
5% shareholder of the employer maintaining the plan.
Spouse,
•
Ancestor or lineal descendant of the individual or the
•
individual's spouse, and
5
Instructions for Form 5330
A brother or sister of the individual or of the individual's
to know that the transaction is a prohibited tax shelter
transaction, the entity manager must pay an excise tax under
section 4965(b)(2).
•
spouse and any lineal descendant of the brother or sister.
A spouse of an individual legally separated from an
individual under a decree of divorce or separate maintenance
is not treated as the individual's spouse.
For purposes of section 4965, plan entities are:
Qualified pension, profit-sharing, and stock bonus plans
•
described in section 401(a);
An individual is a disqualified person if:
Annuity plans described in section 403(a);
•
•
•
•
The total number of shares owned by the person and the
•
Annuity contracts described in section 403(b);
Qualified tuition programs described in section 529;
Retirement plans maintained by a governmental employer
members of the person's family, as defined in
section 409(p)(4)(D), is at least 20% of the deemed-owned
shares, as defined in section 409(p)(4)(C), in the S
corporation; or
described in section 457(b);
Individual retirement accounts within the meaning of
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The person owns at least 10% of the deemed-owned
•
section 408(a);
Individual retirement annuities within the meaning of
shares, as defined in section 409(p)(4)(C), in the S
corporation.
•
section 408(b);
Archer medical savings accounts (MSAs) within the
Under section 409(p)(7), the Secretary of the
•
Treasury may, through regulations or other guidance
meaning of section 220(d);
Coverdell education savings accounts described in
!
CAUTION
of general applicability, provide that a nonallocation
•
year occurs in any case in which the principal purpose of the
ownership structure of an S corporation constitutes an
avoidance or evasion of section 409(p). See Regulations
section 1.408(p)-1.
section 530; and
Health savings accounts (HSAs) within the meaning of
•
section 223(d).
An entity manager is the person who approves or
otherwise causes the entity to be a party to a prohibited tax
shelter transaction.
The excise tax under section 4965(a)(2) is $20,000 for
each approval or other act causing the organization to be a
party to a prohibited tax shelter transaction.
A “prohibited tax shelter transaction” is any listed
transaction and any prohibited reportable transaction, as
defined later.
1. A “listed transaction” is a reportable transaction that is
the same as, or substantially similar to, a transaction
specifically identified by the Secretary of the Treasury as a
tax avoidance transaction for purposes of section 6011.
For section 4979A excise taxes, the amount entered on
Part I, line 6, is 50% of the amount involved in the prohibited
allocations described in items 1 through 4, earlier, under
Line 6.
Line 10a. Under section 4971(g)(2), each employer who
contributes to a multiemployer plan and fails to comply with a
funding improvement or rehabilitation plan will be liable for an
excise tax for each failure to make a required contribution
within the time frame under such plan. Enter the amount of
each contribution the employer failed to make in a timely
manner.
A “funding improvement plan” is a plan which consists of
the actions, including options or a range of options to be
proposed to the bargaining parties, formulated to provide,
based on reasonably anticipated experience and reasonable
actuarial assumptions, for the attainment of the following
requirements by the plan during the funding improvement
period.
2. A “prohibited reportable transaction” is:
a. Any confidential transaction within the meaning of
Regulations section 1.6011-4(b)(3), or
b. Any transaction with contractual protection within the
meaning of Regulations section 1.6011-4(b)(4).
1. The plan's funded percentage as of the close of the
funding improvement period equals or exceeds a percentage
equal to the sum of:
Part II. Tax Due
If you are filing an amended Form 5330 and you paid
taxes with your original return and those taxes have
the same due date as those previously reported,
a. The percentage as of the beginning of the funding
improvement period, plus
check the box in item H and enter the tax reported on your
original return in the entry space for line 18. If you file Form
5330 for a claim for refund or credit, show the amount of
overreported tax in parentheses on line 19. Otherwise, show
the amount of additional tax due on line 19 and include the
payment with the amended Form 5330.
b. 33% of the difference between 100% and the
percentage as of the beginning of the funding improvement
period (or 20% of the difference if the plan is in seriously
endangered status).
2. No accumulated funding deficiency for any plan year
during the funding improvement period, taking into account
any extension of the amortization period under
section 431(d).
Lines 17 through 19. If you file Form 5330 on paper, make
your check or money order payable to the “United States
Treasury” for the full amount due. Attach the payment to your
return. Write your name, identifying number, plan number,
and “Form 5330, Section ____” on your payment.
A “rehabilitation plan” is a plan which consists of actions,
including options or a range of options to be proposed to the
bargaining parties, formulated to enable the plan to cease to
be in critical status by the end of the rehabilitation period.
File at the address shown under Where To File, earlier.
All or part of this excise tax may be waived under
section 4971(g)(5).
Line 16. If a tax-exempt entity manager approves or
otherwise causes the entity to be a party to a prohibited tax
shelter transaction during the year and knows or has reason
6
Instructions for Form 5330
contributions made on behalf of the employer or the
employer's family.
For purposes of this exception, the combined plan
deduction limits are first applied to contributions to the
defined benefit plan and then to the defined contribution plan.
Restorative payments to a defined contribution plan are
not considered nondeductible contributions if the payments
are made to restore some or all of the plan's losses due to an
action (or a failure to act) that creates a reasonable risk of
liability for breach of fiduciary duty. Amounts paid in excess of
the loss are not considered restorative payments.
For these purposes, multiemployer plans are not taken
into consideration in applying the overall limit on deductions
where there is a combination of defined benefit and defined
contribution plans.
Schedule A. Tax on Nondeductible
Employer Contributions to Qualified
Employer Plans (Section 4972)
Section 4972. Section 4972 imposes an excise tax on
employers who make nondeductible contributions to their
qualified plans. The excise tax is equal to 10% of the
nondeductible contributions in the plan as of the end of the
employer's tax year.
A “qualified employer plan” for purposes of this section
means any plan qualified under section 401(a), any annuity
plan qualified under section 403(a), and any simplified
employee pension plan qualified under section 408(k) or any
simple retirement account under section 408(p). The term
qualified plan does not include certain governmental plans
and certain plans maintained by tax-exempt organizations.
Schedule B. Tax on Excess
Contributions to Section 403(b)(7)(A)
Custodial Accounts
For purposes of section 4972, “nondeductible
contributions” for the employer's current tax year are the sum
of:
1. The excess (if any) of the employer's contribution for
the tax year less the amount allowable as a deduction under
section 404 for that year; and
2. The total amount of the employer's contributions for
each preceding tax year that was not allowable as a
deduction under section 404 for such preceding year,
reduced by the sum of:
a. The portion of that amount available for return under
the applicable qualification rules and actually returned to the
employer prior to the close of the current tax year; and
(Section 4973(a)(3))
Section 4973(a) imposes a 6% excise tax on excess
contributions to section 403(b)(7)(A) custodial accounts at
the close of the tax year. The tax is paid by the individual
account holder.
Line 1. Enter total current year contributions, less any
rollover contributions described in section 403(b)(8) or 408(d)
(3)(A).
Line 2. Enter the amount excludable under section 415(c)
(limit on annual additions).
b. The portion of such amount that became deductible for
a preceding tax year or for the current tax year.
To determine the amount excludable for a specific
year, see Pub. 571, Tax-Sheltered Annuity Plans
(403(b) Plans), for that year.
TIP
Although pre-1987 nondeductible contributions are not
subject to this excise tax, they are taken into account to
determine the extent to which post-1986 contributions are
deductible. See section 4972 and Pub. 560, Retirement
Plans for Small Business, for details.
The limit on annual additions under section 415(c)(1)(A) is
subject to cost-of-living adjustments as described in
section 415(d). The dollar limit for a calendar year, as
adjusted annually, is published during the fourth quarter of
the prior calendar year in the Internal Revenue Bulletin.
Defined benefit plans exception. For purposes of
determining the amount of nondeductible contributions
subject to the 10% excise tax, the employer may elect not to
include any contributions to a defined benefit plan except, in
the case of a multiemployer plan, to the extent those
contributions exceed the full-funding limitation (as defined in
section 431(c)(6)). This election applies to terminated and
ongoing plans. An employer making this election cannot also
benefit from the exceptions for terminating plans and for
certain contributions to defined contribution plans under
section 4972(c)(6). When determining the amount of
nondeductible contributions, the deductible limits under
section 404(a)(7) must be applied first to contributions to
defined contribution plans and then to contributions to
defined benefit plans.
Schedule C. Tax on Prohibited
Transactions (Section 4975)
Section 4975. Section 4975 imposes an excise tax on a
disqualified person who engages in a prohibited transaction
with the plan.
Plan. For purposes of this section, the term “plan” means
any of the following.
A trust described in section 401(a) that forms part of a
•
plan.
A plan described in section 403(a) that is exempt from tax
•
under section 501(a).
Defined contribution plans exception. In determining
the amount of nondeductible contributions subject to the 10%
excise tax, do not include any of the following.
An individual retirement account described in
•
section 408(a).
An individual retirement annuity described in
•
Employer contributions to one or more defined contribution
•
section 408(b).
plans that are nondeductible solely because of
section 404(a)(7) that do not exceed the matching
contributions described in section 401(m)(4)(A).
An Archer MSA described in section 220(d).
•
•
A Coverdell education savings account described in
section 530.
Contributions to a SIMPLE 401(k) or a SIMPLE IRA
•
A Health Savings Account (HSA) described in section
•
considered nondeductible because they are not made in
connection with the employer's trade or business. However,
this provision pertaining to SIMPLEs does not apply to
223(d).
A trust described in section 501(c)(22).
•
7
Instructions for Form 5330
Note. For purposes of section 4975, the term “plan” does not
include a section 403(b) tax-sheltered annuity plan. See
section 4975(e).
3. Furnishing of goods, services, or facilities between a
plan and a disqualified person;
4. Transfer to, or use by or for the benefit of, a disqualified
person of income or assets of a plan;
If the IRS determined at any time that your plan was a
plan as defined above, it will always remain subject to
5. Act by a disqualified person who is a fiduciary dealing
with the income or assets of a plan in the disqualified
person’s own interest or account; or
6. Receipt of any consideration for a disqualified person’s
own personal account by any disqualified person who is a
fiduciary from any party dealing with the plan connected with
a transaction involving the income or assets of the plan.
!
CAUTION
the excise tax on prohibited transactions under
section 4975. This also applies to the tax on minimum
funding deficiencies under section 4971.
Disqualified person. A “disqualified person” is a person
who is any of the following.
1. A fiduciary.
Exemptions. See sections 4975(d), 4975(f)(6)(B)(ii), and
4975(f)(6)(B)(iii) for specific exemptions to prohibited
transactions. Also, see section 4975(c)(2) for certain other
transactions or classes of transactions that may become
exempt.
Line 1. Check the box that best characterizes the prohibited
transaction for which an excise tax is being paid. A prohibited
transaction is discrete unless it is of an ongoing nature.
Transactions involving the use of money (loans, etc.) or other
property (rent, etc.) are of an ongoing nature and will be
treated as a new prohibited transaction on the first day of
each succeeding tax year or part of a tax year that is within
the taxable period.
Line 2, column (b). List the date of all prohibited
transactions that took place in connection with a particular
plan during the current tax year. Also, list the date of all
prohibited transactions that took place in prior years unless
either the transaction was corrected in a prior tax year or the
section 4975(a) tax was assessed in the prior tax year. A
disqualified person who engages in a prohibited transaction
must file a separate Form 5330 to report the excise tax due
under section 4975 for each tax year.
2. A person providing services to the plan.
3. An employer, any of whose employees are covered by
the plan.
4. An employee organization, any of whose members are
covered by the plan.
5. A direct or indirect owner of 50% or more of:
a. The combined voting power of all classes of stock
entitled to vote, or the total value of shares of all classes of
stock of a corporation;
b. The capital interest or the profits interest of a
partnership; or
c. The beneficial interest of a trust or unincorporated
enterprise in (a), (b), or (c), which is an employer or an
employee organization described in (3) or (4) above. A
limited liability company should be treated as a corporation or
a partnership, depending on how the organization is treated
for federal tax purposes.
6. A member of the family of any individual described in
(1), (2), (3), or (5). A “member of a family” is the spouse,
ancestor, lineal descendant, and any spouse of a lineal
descendant.
7. A corporation, partnership, or trust or estate of which
(or in which) any direct or indirect owner holds 50% or more
of the interest described in (5a), (5b), or (5c) of such entity.
For this purpose, the beneficial interest of the trust or estate
is owned, directly or indirectly, or held by persons described
in (1) through (5).
8. An officer, director (or an individual having powers or
responsibilities similar to those of officers or directors), a 10%
or more shareholder or highly compensated employee
(earning 10% or more of the yearly wages of an employer) of
a person described in (3), (4), (5), or (7).
Line 2, columns (d) and (e). The “amount involved in a
prohibited transaction” means the greater of the amount of
money and the fair market value (FMV) of the other property
given, or the amount of money and the FMV of the other
property received. However, for services described in
sections 4975(d)(2) and (10), the amount involved only
applies to excess compensation. For purposes of
section 4975(a), FMV must be determined as of the date on
which the prohibited transaction occurs. If the use of money
or other property is involved, the amount involved is the
greater of the amount paid for the use or the FMV of the use
for the period for which the money or other property is used.
In addition, transactions involving the use of money or other
property will be treated as giving rise to a prohibited
9. A 10% or more (in capital or profits) partner or joint
venturer of a person described in (3), (4), (5), or (7).
10. Any disqualified person, as described in (1) through (9)
above, who is a disqualified person with respect to any plan
to which a section 501(c)(22) trust applies, that is permitted
to make payments under section 4223 of the Employee
Retirement Income Security Act (ERISA).
transaction occurring on the date of the actual transaction,
plus a new prohibited transaction on the first day of each
succeeding tax year or portion of a succeeding tax year
which is within the taxable period. The “taxable period” for
this purpose is the period of time beginning with the date of
the prohibited transaction and ending with the earliest of:
Prohibited transaction. A “prohibited transaction” is any
1. The date the correction is completed,
2. The date of the mailing of a notice of deficiency, or
direct or indirect:
1. Sale or exchange, or leasing of any property between
a plan and a disqualified person; or a transfer of real or
personal property by a disqualified person to a plan where
the property is subject to a mortgage or similar lien placed on
the property by the disqualified person within 10 years prior
to the transfer, or the property transferred is subject to a
mortgage or similar lien which the plan assumes;
3. The date on which the tax under section 4975(a) is
assessed.
See the instructions for Schedule C, under Additional tax for
failure to correct the prohibited transaction (section 4975(b)),
for the definition of “correction.”
2. Lending of money or other extension of credit between
a plan and a disqualified person;
8
Instructions for Form 5330
Figure 1. Example for the Calendar 2022 Plan Year Used When Filing for the 2022 Tax Year
Schedule C. Tax on Prohibited Transactions (Section 4975) (see instructions) Reported by the last day of the 7th
month after the end of the tax year of the employer (or other person who must file the return)
(a)
Transaction
number
(b) Date of
transaction
(see
(d) Amount involved in prohibited
transaction (see instructions)
(e) Initial tax on prohibited
transaction (multiply each
transaction in column (d) by the
appropriate rate (see
(c) Description of prohibited transaction
instructions)
instructions))
(i)
(ii)
(iii)
7-1-22
Loan
$6,000
$900
3 Add amounts in column (e). Enter here and on Part I, line 3a
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
$900
▶
Temporary Regulations section 141.4975-13 states
that, until final regulations are written under section
4975(f), the definitions of amount involved and
on December 31, 2022, and the second occurring on
January 1, 2023, and ending on December 31, 2023.
Section 4975(a) imposes a 15% excise tax on the amount
involved for each tax year or part thereof in the taxable period
of each prohibited transaction.
!
CAUTION
correction found in Regulations section 53.4941(e)-1 will
apply.
Failure to transmit participant contributions. For
purposes of calculating the excise tax on a prohibited
transaction where there is a failure to transmit participant
The Form 5330 for the year ending December 31,
2022. The amount involved to be reported in Form 5330,
Schedule C, line 2, column (d), for the 2022 plan year, is
$6,000 (6 months x $1,000). The tax due is $900 ($6,000 x
15%). (See Figure 1 above.) (Any interest and penalties
imposed for the delinquent filing of Form 5330 and the
delinquent payment of the excise tax for 2022 will be billed
separately to the disqualified person.)
contributions (elective deferrals) or amounts that would have
otherwise been payable to the participant in cash, the
amount involved is based on interest on those elective
deferrals. See Rev. Rul. 2006-38.
Column (e). The initial tax on a prohibited transaction is
15% of the amount involved in each prohibited transaction for
each year or part of a year in the taxable period. Multiply the
amount in column (d) by 15%.
The Form 5330 for the year ending December 31,
2023. The excise tax to be reported on the 2023 Form 5330
would include both the prohibited transaction of July 1, 2022,
with an amount involved of $6,000, resulting in a tax due of
$900 ($6,000 x 15%), and the second prohibited transaction
of January 1, 2023, with an amount involved of $12,000 (12
months x $1,000), resulting in a tax due of $1,800 ($12,000 x
15%). (See Figure 2, later.) The taxable period for the second
prohibited transaction runs from January 1, 2023, through
December 31, 2023 (date of correction). Because there are
two prohibited transactions with taxable periods running
during 2023, the section 4975(a) tax is due for the 2023 tax
year for both prohibited transactions.
Example. The example of a prohibited transaction below
does not cover all types of prohibited transactions. For more
examples, see Regulations section 53.4941(e)-1(b)(4).
A disqualified person borrows money from a plan in a
prohibited transaction under section 4975. The FMV of the
use of the money and the actual interest on the loan is $1,000
per month (the actual interest is paid in this example). The
loan was made on July 1, 2022 (date of transaction), and
repaid on December 31, 2023 (date of correction). The
disqualified person's tax year is the calendar year. On July
31, 2024, the disqualified person files a delinquent Form
5330 for the 2022 plan year (which in this case is the
calendar year) and a timely Form 5330 for the 2023 plan year
(which in this case is the calendar year). No notice of
deficiency with respect to the tax imposed by section 4975(a)
has been mailed to the disqualified person and no
When a loan from a qualified plan that is a prohibited
transaction spans successive tax years, constituting
multiple prohibited transactions, and during those
TIP
years the first tier prohibited transaction excise tax rate
changes, the first tier excise tax liability for each prohibited
transaction is the sum of the products resulting from
multiplying the amount involved for each year in the taxable
period for that prohibited transaction by the excise tax rate in
effect at the beginning of that taxable period. For more
information, see Rev. Rul. 2002-43, 2002-32 I.R.B. 85 at
www.irs.gov/pub/irs-irbs/irb02-28.pdf. Unlike the previous
example, the example in Rev. Rul. 2002-43 contains unpaid
interest.
assessment of such excise tax has been made by the IRS
before the time the disqualified person filed the Forms 5330.
Each prohibited transaction has its own separate taxable
period that begins on the date the prohibited transaction
occurred or is deemed to occur and ends on the date of the
correction. The taxable period that begins on the date the
loan occurs runs from July 1, 2022 (date of loan), through
December 31, 2023 (date of correction). When a loan is a
prohibited transaction, the loan is treated as giving rise to a
prohibited transaction on the date the transaction occurs, and
an additional prohibited transaction on the first day of each
succeeding tax year (or portion of a tax year) within the
taxable period that begins on the date the loan occurs.
Therefore, in this example, there are two prohibited
Additional tax for failure to correct the prohibited
transaction (section 4975(b)). To avoid liability for
additional taxes and penalties, and in some cases further
initial taxes, a correction must be made within the taxable
period. The term “correction” is defined as undoing the
prohibited transaction to the extent possible, but in any case
placing the plan in a financial position not worse than that in
transactions, the first occurring on July 1, 2022, and ending
9
Instructions for Form 5330
Figure 2. Example for the Calendar 2023 Plan Year Used When Filing for the 2023 Tax Year
Schedule C. Tax on Prohibited Transactions (Section 4975) (see instructions) Reported by the last day of the 7th
month after the end of the tax year of the employer (or other person who must file the return)
(a)
Transaction
number
(b) Date of
transaction
(see
(d) Amount involved in prohibited
transaction (see instructions)
(e) Initial tax on prohibited
transaction (multiply each
transaction in column (d) by the
appropriate rate (see
(c) Description of prohibited transaction
instructions)
instructions))
(i)
(ii)
(iii)
7-1-22
1-1-23
Loan
Loan
$6,000
$900
$12,000
$1,800
3 Add amounts in column (e). Enter here and on Part I, line 3a
.
.
.
.
.
.
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$2,700
▶
which it would be if the disqualified person were acting under
the highest fiduciary standards.
Correcting certain prohibited transactions. Generally,
if a disqualified person enters into a direct or indirect
prohibited transaction, listed in (1) through (4) below, in
connection with the acquisition, holding, or disposition of
certain securities or commodities, and the transaction is
corrected within the correction period, it will not be treated as
a prohibited transaction and no tax will be assessed.
If the prohibited transaction is not corrected within the
taxable period, an additional tax equal to 100% of the amount
involved will be imposed under section 4975(b). Any
disqualified person who participated in the prohibited
transaction (other than a fiduciary acting only as such) must
pay this tax imposed by section 4975(b). Report the
additional tax on Part I, Section A, line 3b.
1. Sale or exchange, or leasing of any property between
a plan and a disqualified person.
2. Lending of money or other extension of credit between
a plan and a disqualified person.
Line 4. Check “No” if there has not been a correction of all of
the prohibited transactions by the end of the tax year for
which this Form 5330 is being filed. Attach a statement
including item number from line 2a and description indicating
when the correction will be made.
Line 5. If more than one disqualified person participated in
the same prohibited transaction, list on this schedule the
name, address, and SSN or EIN of each disqualified person,
other than the disqualified person who files this return.
For all transactions, complete columns (a), (b), and (c). If
the transaction has been corrected, complete columns (a)
through (e). If additional space is needed, you may attach a
statement fully explaining the correction and identifying
persons involved in the prohibited transaction.
Prohibited transactions and investment advice. The
prohibited transaction rules of section 4975(c) will not apply
to any transaction in connection with investment advice if the
investment advice provided by a fiduciary adviser is provided
under an eligible investment advice arrangement.
3. Furnishing of goods, services, or facilities between a
plan and a disqualified person.
4. Transfer to, or use by or for the benefit of, a disqualified
person of income or assets of a plan.
However, if, at the time the transaction was entered into,
the disqualified person knew or had reason to know that the
transaction was prohibited, the transaction would be subject
to the tax on prohibited transactions.
For purposes of section 4975(d)(23), the term “correct”
means to:
Undo the transaction to the extent possible and in all cases
•
to make good to the plan or affected account any losses
resulting from the transaction, and
Restore to the plan or affected account any profits made
•
through the use of assets of the plan.
The “correction period” is the 14-day period beginning on
the date on which the disqualified person discovers or
reasonably should have discovered that the transaction
constitutes a prohibited transaction.
For this purpose, an “eligible investment advice
arrangement” is an arrangement that either:
Provides that any fees, including any commission or other
•
Schedule D. Tax on Failure To Meet
Minimum Funding Standards
(Section 4971(a))
compensation, received by the fiduciary adviser for
investment advice or with respect to the sale, holding, or
acquisition of any security or other property for the
investment of plan assets do not vary depending on the basis
of any investment option selected; or
In the case of a single-employer plan, section 4971(a)
imposes a 10% tax on the aggregate unpaid minimum
required contributions for all plan years remaining unpaid as
of the end of any plan year. In the case of a multiemployer
plan, section 4971(a) imposes a 5% tax on the amount of the
accumulated funding deficiency determined as of the end of
the plan year.
Uses a computer model under an investment advice
•
program, described in section 4975(f)(8)(C), in connection
with investment advice provided by a fiduciary adviser to a
participant or beneficiary.
Additionally, the eligible investment advice arrangement must
meet the provisions of sections 4975(f)(8)(D), (E), (F), (G),
(H), and (I).
If a plan fails to meet the funding requirements under
section 412, the employer and all controlled group members
will be subject to excise taxes under sections 4971(a) and
(b).
For purposes of the statutory exemption on investment
advice, a “fiduciary adviser” is defined in
section 4975(f)(8)(J).
10
Instructions for Form 5330
Except in the case of a multiemployer plan, all members of
a controlled group are jointly and severally liable for this tax.
A “controlled group” in this case means a controlled group of
corporations under section 414(b), a group of trades or
businesses under common control under section 414(c), an
affiliated service group under section 414(m), and any other
group treated as a single employer under section 414(o).
additional tax will be imposed under section 4971(f)(2) equal
to the amount on which tax was imposed by
section 4971(f)(1) for such quarter. Report the additional tax
on Part I, Section B, line 9b.
Schedule F. Tax on Multiemployer
Plans in Endangered or Critical
Status (Sections
If the IRS determined at any time that your plan was a
plan as defined on Schedule C, it will always remain
!
CAUTION
subject to the excise tax on failure to meet minimum
4971(g)(3) and 4971(g)(4))
funding standards.
For years beginning after 2007, section 4971(g) imposes an
excise tax on employers who contribute to multiemployer
plans for failure to comply with a funding improvement or
rehabilitation plan, failure to meet requirements for plans in
endangered or critical status, or failure to adopt a
Line 1. Enter the amount (if any) of the aggregate unpaid
minimum required contributions (or in the case of a
multiemployer plan, an accumulated funding deficiency as
defined in section 431(a) (or section 418B if a multiemployer
plan in reorganization)).
rehabilitation plan. See the instructions for line 10a, earlier.
Line 1. Under section 4971(g)(3), a multiemployer plan that
is in seriously endangered status when it fails to meet its
applicable benchmarks by the end of the funding
Line 2. Multiply line 1 by the applicable tax rate shown below
and enter the result.
10% for plans other than multiemployer plans.
5% for all multiemployer plans.
Additional tax for failure to correct. For single-employer
•
improvement period will be treated as having an accumulated
funding deficiency for the last plan year in such period and
each succeeding year until the funding benchmarks are met.
•
plans, when an initial tax is imposed under section 4971(a)
on any unpaid minimum required contribution and the unpaid
minimum required contribution remains unpaid as of the
close of the taxable period, an additional tax of 100% of the
amount that remains unpaid is imposed under section
4971(b).
Similarly, a plan that is in critical status and either fails to
meet the requirements of section 432 by the end of the
rehabilitation period, or has received certification under
section 432(b)(3)(A)(ii) for 3 consecutive plan years that the
plan is not making the scheduled progress in meeting its
requirements under the rehabilitation plan, will be treated as
having an accumulated funding deficiency for the last plan
year in such period and each succeeding plan year until the
funding requirements are met.
In both cases, the accumulated funding deficiency is an
amount equal to the greater of the amount of the
contributions necessary to meet the benchmarks or
requirements, or the amount of the accumulated funding
deficiency without regard to this rule. The existence of an
accumulated funding deficiency triggers the initial 5% excise
tax under section 4971(a).
For multiemployer plans, when an initial tax is imposed
under section 4971(a)(2) on an accumulated funding
deficiency and the accumulated funding deficiency is not
corrected within the taxable period, an additional tax equal to
100% of the accumulated funding deficiency, to the extent
not corrected, is imposed under section 4971(b).
For this purpose, the “taxable period” is the period
beginning with the end of the plan year where there is an
unpaid minimum required contribution or an accumulated
funding deficiency and ending on the earlier of:
The date the notice of deficiency for the section 4971(a)
•
A plan is in “endangered status” if either of the following
excise tax is mailed, or
occurs.
The date the section 4971(a) excise tax is assessed.
Report the tax for failure to correct the unpaid minimum
•
The plan's actuary timely certifies that the plan is not in
•
critical status for that plan year and at the beginning of that
plan year the plan's funded percentage for the plan year is
less than 80%.
required contribution or the accumulated funding deficiency
on Part I, Section B, line 8b.
The plan has an accumulated funding deficiency for the
•
Schedule E. Tax on Failure To Pay
plan year or is projected to have such an accumulated
funding deficiency for any of the 6 succeeding plan years,
taking into account any extension of amortization periods
under section 431(d).
Liquidity Shortfall (Section 4971(f)(1))
If your plan has a liquidity shortfall for which an excise tax
under section 4971(f)(1) is imposed for any quarter of the
plan year, complete lines 1 through 4.
A plan is in “critical status” if it is determined by the
multiemployer plan's actuary that one of the four formulas in
section 432(b)(2) is met for the applicable plan year.
Line 1. Enter the amount of the liquidity shortfall(s) for each
quarter of the plan year.
All or part of this excise tax may be waived due to
Line 2. Enter the amount of any contributions made to the
plan by the due date of the required quarterly installment(s)
that partially corrected the liquidity shortfall(s) reported on
line 1.
Line 3. Enter the net amount of the liquidity shortfall.
(Subtract line 2 from line 1.)
Additional tax for failure to correct liquidity shortfall.
If the plan has a liquidity shortfall as of the close of any
quarter and as of the close of the following 4 quarters, an
reasonable cause.
Line 2. Under section 4971(g)(4), the plan sponsor of a
multiemployer plan in critical status, as defined above, will be
liable for an excise tax for failure to adopt a rehabilitation plan
within the time prescribed under section 432. The tax is equal
to the greater of:
The amount of tax imposed under section 4971(a)(2); or
An amount equal to $1,100, multiplied by the number of
•
•
days in the tax year which are included in the period that
begins on the first day following the close of the 240-day
11
Instructions for Form 5330
period that a multiemployer plan has to adopt a rehabilitation
plan once it has entered critical status and that ends on the
day the rehabilitation plan is adopted. Section 432(e)(1)(A)
allows the plan sponsor to adopt a rehabilitation plan within
the 240-day period following the required date for the
employer contributions that could have been made without
violating the special nondiscrimination requirements of
section 401(k)(3) or section 408(k)(6) in the instance of
certain SEPs.
The excess aggregate contributions subject to the section
4979 excise tax are equal to the amount by which the
aggregate matching contributions of the employer and the
employee contributions (and any qualified nonelective
contribution or elective contribution taken into account in
computing the contribution percentage under section
401(m)) actually made on behalf of the highly compensated
employees for each plan year exceed the maximum amount
of contributions permitted in the contribution percentage
computation under section 401(m)(2)(A).
actuarial certification of critical status in section 432(b)(3)(A).
Liability for this tax is imposed on each plan sponsor. This
excise tax may not be waived.
Follow the instructions as defined above for counting
days and completing line 2b.
!
CAUTION
Complete line 2b as instructed below. Enter the number of
days during the tax year that are included in the period
beginning on the first day following the close of the 240-day
period and ending on the day the rehabilitation plan is
adopted.
However, there is no excise tax liability if the excess
contributions or the excess aggregate contributions and any
income earned on the contributions are distributed (or, if
forfeitable, forfeited) to the participants for whom the excess
contributions were made within 21/2 months after the end of
the plan year.
Schedule G. Tax on Excess Fringe
Benefits (Section 4977)
If you made an election to be taxed under section 4977 to
continue your nontaxable fringe benefit policy that was in
existence on or after January 1, 1984, check “Yes” on line 1
and complete lines 2 through 4.
Schedule I. Tax on Reversion of
Qualified Plan Assets to an Employer
(Section 4980)
Line 3. Excess fringe benefits are calculated by subtracting
1% of the aggregate compensation paid by you to your
employees during the calendar year that was includible in
their gross income from the aggregate value of the
Section 4980 imposes an excise tax on an employer
reversion of qualified plan assets to an employer. Generally,
the tax is 20% of the amount of the employer reversion. The
excise tax rate increases to 50% if the employer does not
establish or maintain a qualified replacement plan following
the plan termination or provide certain pro-rata benefit
increases in connection with the plan termination. See
section 4980(d)(1)(A) or (B) for more information.
nontaxable fringe benefits under sections 132(a)(1) and (2).
Schedule H. Tax on Excess
Contributions to Certain Plans
(Section 4979)
An “employer reversion” is the amount of cash and the
FMV of property received, directly or indirectly, by an
employer from a qualified plan. For exceptions to this
definition, see section 4980(c)(2)(B) and section 4980(c)(3).
Any employer who maintains a plan described in section
401(a), 403(a), 403(b), 408(k), or 501(c)(18) may be subject
to an excise tax on excess aggregate contributions made on
behalf of highly compensated employees. The employer may
also be subject to an excise tax on excess contributions to a
cash or deferred arrangement connected with the plan.
A “qualified plan” is:
Any plan meeting the requirements of section 401(a) or
•
403(a), other than a plan maintained by an employer if that
employer has at all times been exempt from federal income
tax; or
The tax is on the excess contributions and the excess
aggregate contributions made to or on behalf of the highly
compensated employees as defined in section 414(q).
A governmental plan within the meaning of section 414(d).
•
Terminated defined benefit plan. If a defined benefit
Generally, a “highly compensated employee” is an
employee who:
plan is terminated, and an amount in excess of 25% of the
maximum amount otherwise available for reversion is
transferred from the terminating defined benefit plan to a
defined contribution plan, the amount transferred is not
treated as an employer reversion for purposes of
section 4980. However, the amount the employer receives is
subject to the 20% excise tax. For additional information, see
Rev. Rul. 2003-85, 2003-32 I.R.B. 291 at www.irs.gov/irb/
Lines 1 through 4. Enter the date of reversion on line 1.
Enter the reversion amount on line 2a and the applicable
excise tax rate on line 2b. If you use a tax percentage other
than 50% on line 2b, explain on line 4 why you qualify to use
a rate other than 50%.
1. Was a 5% owner at any time during the year or the
preceding year; or
2. For the preceding year, had compensation from the
employer in excess of a dollar amount for the year ($150,000
for 2023) and, if the employer so elects, was in the top paid
group for the preceding year.
An employee is in the “top-paid group” for any year if the
employee is in the group consisting of the top 20% of
employees when ranked on the basis of compensation paid.
An employee (who is not a 5% owner) who has
compensation in excess of $150,000 is not a highly
compensated employee if the employer elects the top-paid
group limitation and the employee is not a member of the
top-paid group.
The excess contributions subject to the section 4979
excise tax are equal to the amount by which employer
contributions actually paid over to the trust exceed the
12
Instructions for Form 5330
If the person subject to liability for the excise tax exercised
reasonable diligence to meet the notice requirement, the total
excise tax imposed during a tax year of the employer will not
exceed $500,000. Furthermore, in the case of a failure due to
reasonable cause and not to willful neglect, the Secretary of
the Treasury is authorized to waive the excise tax to the
extent that the payment of the tax would be excessive relative
to the failure involved. See Rev. Proc. 2013-4, 2013-1 I.R.B.
123, as revised by subsequent documents, available at
www.irs.gov/irb/2013-01_IRB/ar09.html, for procedures to
follow in applying for a waiver of part or all of the excise tax
due to reasonable cause.
Schedule J. Tax on Failure To Provide
Notice of Significant Reduction in
Future Accruals (Section 4980F)
Section 204(h) notice. Section 4980F imposes an excise
tax on an employer (or, in the case of a multiemployer plan,
the plan) for failure to give section 204(h) notice of plan
amendments that provide for a significant reduction in the
rate of future benefit accrual or the elimination or significant
reduction of an early retirement benefit or retirement-type
subsidy. The tax is $100 per day per each applicable
individual and each employee organization representing
participants who are applicable individuals for each day of
the noncompliance period. This notice is called a “section
204(h) notice” because section 204(h) of ERISA has parallel
notice requirements.
An “applicable individual” is a participant in the plan, or an
alternate payee of a participant under a qualified domestic
relations order, whose rate of future benefit accrual (or early
retirement benefit or retirement-type subsidy) under the plan
may reasonably be expected to be significantly reduced by a
plan amendment. (For plan years beginning after December
31, 2007, the requirement to give 204(h) notice was extended
to an employer who has an obligation to contribute to a
multiemployer plan.)
Line 4. A failure occurs on any day that any applicable
individual (AI) is not provided section 204(h) notice.
Example. There are 1,000 AIs. The plan administrator
fails to give section 204(h) notice to 100 AIs for 60 days, and
to 50 of those AIs for an additional 30 days. In this case, there
are 7,500 failures ((100 AIs x 60 days) + (50 AIs x 30 days) =
7,500).
Schedule K. Tax on Prohibited Tax
Shelter Transactions (Section 4965)
Section 4965 provides that an entity manager of a tax-exempt
organization may be subject to an excise tax on prohibited
tax shelter transactions under section 4965. In the case of a
plan entity, an entity manager is any person who approves or
otherwise causes the tax-exempt entity to be a party to a
prohibited tax shelter transaction. The excise tax is $20,000
and is assessed for each approval or other act causing the
organization to be a party to the prohibited tax shelter
transaction.
Whether a participant, alternate payee, or an employer (as
described in the above paragraph) is an applicable individual
is determined on a typical business day that is reasonably
approximate to the time the section 204(h) notice is provided
(or on the latest date for providing section 204(h) notice, if
earlier), based on all relevant facts and circumstances. For
more information in determining whether an individual is a
participant or alternate payee, see Regulations
Schedule L. Tax on Failure of a
Cooperative and Small Employer
Charity (CSEC) Plan Sponsor To
Adopt Funding Restoration Plan
section 54.4980F-1, Q&A 10.
The “noncompliance period” is the period beginning on
the date the failure first occurs and ending on the date the
notice of failure is provided or the failure is corrected.
Exceptions. The section 4980F excise tax will not be
imposed for a failure during any period in which the following
occurs.
1. Any person subject to liability for the tax did not know
that the failure existed and exercised reasonable diligence to
meet the notice requirement. A person is considered to have
exercised reasonable diligence but did not know the failure
existed only if:
a. The responsible person exercised reasonable
diligence in attempting to deliver section 204(h) notice to
applicable individuals by the latest date permitted; or
b. At the latest date permitted for delivery of section
204(h) notice, the person reasonably believed that section
204(h) notice was actually delivered to each applicable
individual by that date.
(Section 4971(h))
A CSEC plan is:
a defined benefit plan (other than a multiemployer plan)
•
including an eligible cooperative plan (as defined in section
104 of the PPA ‘06);
a plan that, as of June 25, 2010, was maintained by more
•
than one section 501(c)(3) organization;
a plan that, as of June 25, 2010, was maintained by a
•
single employer that was a 501(c)(3) organization chartered
under Part B, Subtitle II, Title 36 of the U.S.C., whose primary
exempt purpose is to provide services with respect to
children, and which has employees in at least 40 states; or
any plan that, as of January 1, 2000, was maintained by an
•
employer that is a 501(c)(3) organization, has been in
existence since at least 1938, conducts medical research
directly or indirectly through grant making, and has a primary
exempt purpose to provide services with respect to mothers
and children (section 414(y)(1), amended by section 3609 of
the Coronavirus Aid, Relief, and Economic Security (CARES)
Act (P.L. 116-136)).
2. Any person subject to liability for the tax exercised
reasonable diligence to meet the notice requirement and
corrects the failure within 30 days after the employer (or other
person responsible for the tax) knew, or exercising
reasonable diligence would have known, that the failure
existed.
Section 433(j)(3) requires a CSEC plan sponsor to
establish a written funding restoration plan within 180 days of
the receipt by the plan sponsor of a certification from the plan
actuary that the plan is in funding restoration status for a plan
year. Section 4971(h) imposes an excise tax on the CSEC
plan sponsor for the plan in funding restoration status for the
Generally, section 204(h) notice must be provided at least
45 days before the effective date of the section 204(h)
amendment. For exceptions to this rule, see Regulations
section 54.4980F-1, Q&A 9.
13
Instructions for Form 5330
failure to adopt a funding restoration plan within the time
prescribed under section 433(j)(3).
A CSEC plan is treated as being in funding restoration
status for a plan year if the plan's funded percentage as of
the beginning of such plan year is less than 80%. Funded
percentage means the ratio that the value of plan assets
bears to the plan's funding liability.
Line 1. Under section 4971(h)(2), the excise tax amount with
respect to any CSEC plan sponsor for any tax year should be
the amount equal to $100 multiplied by the number of days
during the tax year that are included in the period beginning
on the day following the close of the 180-day period
described in section 433(j)(3) and ending on the day on
which the funding restoration plan is adopted.
Line 2. Calculate the excise tax amount by multiplying days
entered on line 1 by $100. Enter the excise tax amount on
line 2 and on Part I, line 10d.
administering their tax laws. We may also disclose this
information to federal and state or local agencies to enforce
federal nontax criminal laws and to combat terrorism.
You are not required to provide the information requested
on a form that is subject to the Paperwork Reduction Act
unless the form displays a valid OMB control number. Books
or records relating to a form or its instructions must be
retained as long as their contents may become material in the
administration of any Internal Revenue law. Generally, tax
returns and return information are confidential, as required by
section 6103.
The time needed to complete and file this form will vary
depending on individual circumstances. The estimated
average time is:
Recordkeeping. . . . . . . . . . .
30 hr., 22 min.
15 hr., 45 min.
18 hr., 08 min.
Learning about the law or
the form . . . . . . . . . . . . . . . .
All or part of this excise tax may be waived if the IRS
determines that a failure is due to reasonable cause and not
to willful neglect.
Preparing and sending the
form to the IRS . . . . . . . . . . .
Privacy Act and Paperwork Reduction Act Notice. We
ask for the information on this form to carry out the Internal
Revenue laws of the United States. This form is required to
be filed under sections 4965, 4971, 4972, 4973, 4975, 4976,
4977, 4978, 4979, 4979A, 4980, and 4980F of the Internal
Revenue Code. Section 6109 requires you to provide your
identifying number. If you fail to provide this information in a
timely manner, you may be liable for penalties and interest.
Routine uses of this information include giving it to the
Department of Justice for civil and criminal litigation, and to
cities, states, and the District of Columbia for use in
If you have comments concerning the accuracy of these
time estimates or suggestions for making this form simpler,
we would be happy to hear from you. You can send us
to the Internal Revenue Service, Tax Forms and Publications
Division, 1111 Constitution Ave. NW, IR-6526, Washington,
DC 20224. Do not send Form 5330 to this address. Instead,
see Where To File, earlier.
14
Instructions for Form 5330
Index
A
Liquidity shortfall:
Q
M
C
R
Minimum funding standards,
Reversion of qualified plan
failure 10
assets 12
D
N
Disqualified benefit, funded welfare
plans 4
S
Nondeductible employer
contributions 7
Exception, defined contribution
plan 7
E
Eligible investment advice
arrangement 10
ESOP 5
Notice of significant reduction in
Excess contributions:
P
Penalty 3
Extension 2
Prohibited allocation:
ESOP 5
F
H
T
I
Correcting 10
Interest 3
Definition 8
W
L
Exemptions 8
Interest 3
Penalty 3
15