QUESTION: We obtained an extension for filing our company’s federal income tax return. Can we rely on that extension to extend the Form 5500 due date for our company’s group health and 401(k) plans instead of filing Form 5558 for an extension?
ANSWER: Yes, if certain requirements are satisfied, your company’s federal income tax return extension will automatically extend the deadline for its Form 5500 (Annual Return/Report of Employee Benefit Plan) filings. But even if your plans qualify for that automatic extension, you may want to consider filing Form 5558 (Application for Extension of Time to File Certain Employee Plan Returns). Here’s why.
The Form 5500 filing deadline is the last day of the seventh month after the close of the plan year (for a calendar-year plan, July 31). That deadline is automatically extended to the extended due date of the sponsoring employer’s federal income tax return if three conditions are satisfied: (1) the plan year and the employer’s tax year are the same; (2) the employer’s federal income tax return extension is to a date that is later than the Form 5500 due date; and (3) a copy of the application for the income tax extension is maintained with the filer’s records (it is not attached to the Form 5500 filing).
For tax years beginning before 2016, the due date for a corporate federal income tax return is the 15th day of the third month following the end of the corporate year (for calendar-year corporations, March 15). The corporate tax extension extends that date six months, so the extended Form 5500 deadline resulting from the income tax extension is September 15 for a calendar-year plan. Filing Form 5558 provides an extension of 2-1/2 months beyond the Form 5500 filing deadline—extending the due date for a calendar year plan to October 15—so filing Form 5558 results in a longer extension.
After 2015, determining the due date of an employer’s federal tax return becomes more complicated because income tax return filing deadlines and the available extension periods differ based on the entity’s corporate form and tax year. For tax years beginning after 2015, the income tax return due date for most corporations is the 15th day of the fourth month following the end of the tax year (for calendar-year corporations, April 15), but S corporations and certain other entities (including, for years beginning before 2026, corporations with a fiscal year ending June 30) have an earlier deadline. The length of the extension period varies depending on the company’s tax year: calendar-year filers get a 5-month extension (i.e., until September 15), but entities with other tax years may get a longer or shorter extension period. Filing Form 5558 provides a clear Form 5500 filing deadline, which may be preferable to navigating these complex rules for years beginning after 2015.
Finally, keep in mind that an automatic extension cannot extend the Form 5500 due date beyond 9-1/2 months after the close of the plan year (for calendar-year plans, October 15). And automatic extensions generally are not available for short plan years, as the plan year will likely not be the same as the employer’s tax year.
For more information, see EBIA’s ERISA Compliance manual at Section XXII.F.2 (“Form 5500 Is Normally Due Seven Months After End of Plan Year”), EBIA’s 401(k) Plans manual at Section XXXI.B (“Basic Form 5500 Rules: Who, When, What, and How”), and EBIA’s Self-Insured Health Plans at Section XXIX.B (“Annual Form 5500 Reporting”). You may also be interested in EBIA’s Form 5500 Workbook for Health & Welfare Plans (2015 Plan Years), which provides line-by-line explanations of Form 5500 and the Schedules and attachments relevant for health and welfare plans, and in our recorded webinar “Form 5500 for Health and Welfare Plans: Preparation and Filing.”
Contributing Editors: EBIA Staff.