Government Forms: What s New, What s Surprising, What s Coming

Transcription

1 Government Forms: What s New, What s Surprising, What s Coming Kristina Kananen, APA QPA QKA DATAIR Employee Benefit Systems, Inc. 1

2 What We Will Discuss Series Government Forms Form 5558 Application for Extension of Time to File Certain Employee Plan Returns Form 8955-SSA Annual Registration Statement Identifying Separated Participants with Deferred Vested Benefits Form 5330 Return of Excise Taxes Related to Employee Benefit Plans And for Fun Form 8822-B Change of Address or Responsible Party - Business 2 2

3 Series Government Forms You may have noticed that IRS Compliance Questions Added in 2015 and 2016 aregone for

4 Series Government Forms As a refresher, these were: Compliance questions about the plan document, plan type, testing, and distributions Trust Name, TIN, Trustee Name and Phone Number Preparer Name, Firm Name, Address and Phone Number 4 4

5 Series Government Forms Modernization was proposed for 2019 reporting year to coordinate with the EFAST2 contract, however Trump was elected and put a hold on new regulations On 3/5/18 IRS issued their findings on the mandated Eliminating Unnecessary Tax Regulations (298 regulations removed) On 2/12/18 Trump issued a Sequestration Order for Fiscal Year 2019 reducing direct spending budgetary resources for fiscal year

6 Series Government Forms What s New Added ability for Service Provider to sign on behalf of the Plan Sponsor or DFE when using E-Signature Alternative. Note Manual Signature Dates can not be before the plan year end, nor after the date the filing was transmitted to EFAST PDF of the filing will now have Filed with authorized/valid electronic signature for the Plan Sponsor. 6 6

7 Series Government Forms What s New Added the prior plan name to Line 4c when a change in the name was made during the plan year EFAST compares Line 1a with the prior year filing Line 4c will be compared with the prior year filing plan name Edit Check Z-004 no longer asks for the same name or abbreviation as was used on prior filings Only changed items need to be entered on Line 4 7 7

8 Series Government Forms What s New, cont d The plus sign can now be included in the Plan Name and the Sponsor Name. For plan years before 2017, including a plus sign caused a schema error. The schema is the rules applied to the format of the xml file and the data entered into the xml file. Legal characters are A to Z, a to z, 0 to 9, #, -, /,., ( ), &,, *, comma 8 8

9 Series Government Forms What s new, cont d One-participant plans with more than 120 partners-owners can now use Form 5500-SF. In Prior years this would flag edit test P-230SF and the processing of the filing would stop EFAST will now bypass the edit check when the one-participant box is checked. 9 9

10 Series Government Forms What s new, cont d A filing may only contain 999 Schedule As 9,999 was too many Schedule As to expect 10 10

11 Series Government Forms Changes for Defined Benefit Plans PBGC premium confirmation number was added to Form 5500-SF Line 6c Schedule SB, Line 33 has two new edit checks: B-728SB No date, but an amount B-729SB Date, but no amount REMEMBER Zero is an amount It does not indicate that the field does not apply to the plan 11 11

12 Series Government Forms Changes for Defined Benefit Plans, cont d Schedule SB Line 32a Balance and 32a Installment In the actuarial world, the installment payment amount of an amortized amount can be larger than the balance Before 2017, it flagged edit check B-668SB 2017 and later, edit check B-668SB has been DELETED Schedule SB Line 10 Interest percent will now accept a value of to

13 Series Government Forms What s new, cont d Effective 1/1/18, any filing for a plan year beginning before 2014 must be completed on 2017 Forms Applies to Amended Filings and DFVCP filings Years prior to 2009 may also have to include correct year schedules in the filing Such as Schedule R, Schedule C, Schedule T, Schedule SB, or any schedule that has changed a great deal since the correct year 13 13

14 Series Government Forms What s new, cont d Number of Active Participants at the beginning of the year can not be greater than the Total Participants at the beginning of the year. DITTO for the end of the year counts 14 14

15 Series Government Forms What s new, cont d If the total plan assets at the end of the year equal zero, but Final Filing is NOT checked, Edit Check P-397SF or P-397 will be flagged as a warning and not an error Checks: Line 7a on Form 5500-SF Line 1f(b) on Schedule H Line 1a(b)on Schedule I 15 15

16 Series Government Forms Review of Criteria for Final Filing Must have zero participants at the end of year Active, Total and those with Account Balances Zero Total Assets, Total Liabilities and Net Assets Must have been a resolution to terminate the plan, with the amount reverting to the Sponsor All assets distributed to participants and beneficiaries Still need an audit report for large plans and small plans must waive the audit 16 16

17 Series Government Forms What s new, cont d IRS changed the Business Codes on Form 5500-EZ ONLY The following Codes are gone: Gas & Oil Extraction Department Stores Formal Wear & Costume Rental Video Tape and Disc Rental Other Consumer Goods Rental 17 17

18 Series Government Forms What s new, cont d IRS added the following Business Codes on Form 5500-EZ ONLY Crude Petroleum Extraction Natural Gas Extraction Department Stores General Merchandise Stores Incl. Warehouse Clubs Supercenters Formal Wear & Costume Rental Video Tape & Disc Rental Home Health Equipment Rental Recreational Goods Rental All Other Consumer Goods Rental 18 18

19 Series Government Forms What s Surprising IRS Reverted to the 2014 instructions for Schedule R as to who does not file Plan is not subject to minimum funding Plan is not an ESOP 1099-Rs for distributions are reported under the EIN of Plan Sponsor or Plan Administrator No benefits payable in property other than cash were distributed 19 19

20 Form 5558 File to gain an additional 2 ½ months to complete and file 5500 Series and Form 8955-SSA Check #1 box, enter extended due dates in Lines 2 and 3 Have proof of mailing and delivery IRS is supposed to mail an acknowledgement NEVER, NEVER, EVER, EVER ignore any correspondence from the IRS about timely filing 20 20

21 Form 5558 Also filed to request an extension for Form 5330, Return of Excise Taxes Related to Employee Benefit Plans Extends only the filing of the form, and not the penalty Separate issues on the Form 5330 have different due dates, requires separate 5558 for each due date involved. Section 4975, delinquent participant contribution deposits is due the last day of the 7 th month following the end of the plan year Section 4979, excess aggregate and excess contributions due last day of 15 th month after the close of the plan year 21 21

22 Form 5558, cont d Extending Form 5330, cont d IRS will send an acknowledgement of the filing to extend the Form 5330 No more stamped copies of the approved form A copy of the filed (signed and dated) Form 5558 must be attached to the Form 5330 A check must be included with the Form 5330 and the form must be signed and dated 22 22

23 Form 8955-SSA Annual Registration Statement Identifying Separated Participants with Deferred Vested Benefits For single employer plans due for the plan year following the plan year in which the participant separated from the company, if not paid out Multiemployer and multiple employer plans must report a deferred vested participant when the participant has incurred 2 consecutive 1-year breaks in service, if not paid out Very beneficial in the long run to report all previously reported (or not) deferred vested participants who have been paid 23 23

24 Form 8955-SSA, cont d When assets and liabilities are transferred to another plan for a deferred vested participant: New Company includes the transferred deferred vested participant as: Code C with prior sponsor s EIN and plan number in Fields h and I If prior sponsor s EIN and plan number not known, report as a Code A with all appropriate fields completed Old Company should report the transferred deferred vested participant as a D Code 24 24

25 Form 8955-SSA Amended Form 8955-SSA If electronically filed, wait until the original filing has been accepted by the FIRE system. An amended filing must include all previously filed correct information as well as the corrected information as the amended filing overwrites the original filing data

26 8955-SSA Electronic Filing Through the FIRE system Transmitter must have its own Transmitter Control Code 5 digits Begins with a 6 Only applicable to 8955-SSA filings IRS requires 45 days to issue the TCC 26 26

27 Form 8955-SSA Failure to File Penalty $1/per participant required to be reported times the number of days of failure to file to a maximum of $5,000 Penalty $1 per day up to $1,000 for failure to notify of change in plan name, Plan Administrator name and address or termination of the plan Penalty $50/per participant for failure to furnish an individual statement to each deferred vested participant 5500 Series not considered filed if the required 8955-SSA is not filed 27 27

28 Form 5330 Return of Excise Taxes Related to Employee Benefit Plans Filed to report various transactions which are not in compliance with current rules. Predominately used to report: Minimum Funding Deficiency Nondeductible Contributions Delinquent Deferral Deposits (Prohibited Transactions) Excess Contributions and Excess Aggregate Contributions 28 28

29 Form 5330 Due Dates: 8 ½ months after the end of the plan year, or last day of the 7 th month after the end of the employer s tax year Minimum Funding Deficiency Last day of the 7 th month following the plan year end Nondeductible contribution Prohibited transactions Last day of the 15 th month after the end of the plan year Excess Contributions and Excess Aggregate Contributions 29 29

30 Form 5330 Filing is due for each year that the circumstance applies, for example: Deferral deposit is missed in 2017 Problem is discovered in 2018 Not resolved until 2019 Form 5330 is due for each year 30 30

31 Form 5330 Excise Tax Minimum Funding Deficiency 10% Nondeductible Contribution 10% Prohibited Transaction (Late deferral deposits) 15% of Amount Involved Excess Contributions/Excess Aggregate Contributions 10% 31 31

32 Form 5330 Penalties Late Filing of the Return 5% of unpaid tax for each month or part of a month the return is late, minimum penalty of the smaller of tax due or $100 Late payment of tax ½% of the unpaid tax for each month or part of a month the tax is not paid, up to a maximum of 25% of unpaid tax Interest is also charged on the late payment Penalties and interest will be billed by the IRS 32 32

33 Form 8822-B Change of Address or Responsible Party Business Different areas of the IRS do not have access to the records of other areas of the IRS Form 8822-B updates the master record of the IRS Reasons to File: Change of attorney, if attorney applied for EIN or TIN Retirement/Death of the Responsible Party Location of the company or the office maintaining the plan records has changed

34 QUESTIONS? 34 34

35 THANK YOU!! Kristina Kananen, APA QPA QKA 35 35

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