Physical presence requirement relief; 5500-EZ and 5310 electronic filing; Drop-in articles (English/Spanish); Updated pubs and information for small employers

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Extension of Relief from Physical Presence Requirement

The IRS released Notice 2021-40 (PDF) which provides a 12-month extension - through June 30, 2022 - of the physical presence requirement for participant elections required to be witnessed by a plan representative or notary republic.

File 2020 Form 5500-EZ Electronically Using EFAST2

Beginning January 1, 2021, a one-participant plan or a foreign plan required to file an annual return must file Form 5500-EZ:

• Electronically using the Department of Labor EFAST2 filing system, or
• On paper with the IRS

A one-participant plan or a foreign plan can no longer file a Form 5500-SF in place of Form 5500-EZ. Plan sponsors are encouraged to file their 2020 Form 5500-EZ electronically. It’s safe, easy to complete, and you have an immediate record that the return was filed.

A Form 5500-EZ filer that’s subject to IRS e-filing requirements (see Mandatory Electronic Filing), is required to file the Form 5500-EZ electronically using EFAST2. Visit the Form 5500 Corner for more information.

Form 5310 Electronic Submission

IRS Form 5310, Application for Determination for Terminating Plan, may be submitted electronically online at www.Pay.gov. After July 31, 2021, all Form 5310 applications must be submitted electronically. Paper submissions postmarked after July 31, 2021 will be returned to the applicant.

The current user fee is $3,500 ($4,500 for multiple employer plans.) Some plans may qualify for the zero-dollar user fee. See Revenue Procedure 2021-4 for information on the latest procedures and user fees for determination letter requests.

Drop-in Articles

The IRS posted a series of drop-in articles, in both English and Spanish, on the IRS Outreach Connection webpage. These articles describe the types of plans that many small employers adopt to help their employees save for retirement. You can use these articles on your website, newsletter, or in other products and publications.

Choosing a Retirement Plan

If you’re a small employer or self-employed individual, starting a retirement plan can benefit you and your employees.

• Employer contributions are tax deductible
• A plan helps attract and retain employees.

• Small employers may receive a tax credit for new plans of up to $5,000/year for three years for the cost of setting up a new plan
• Low- to moderate-income employees may claim a Saver’s Credit of up to 50% for contributions made to IRAs and certain retirement plans

These updated publications can help you find a retirement plan that’s the best fit for your business or organization.

• Pub. 4118 (PDF) Lots of Benefits
• Pub. 3998 (PDF) Choosing A Retirement Solution for Your Small Business (English)
• Pub. 3998 (PDF) Choosing A Retirement Solution for Your Small Business (Spanish)
• Pub. 4222 (PDF) 401(k) Plans for Small Businesses
• Pub. 4333 (PDF) SEP Retirement Plans for Small Businesses
• Pub. 4334 (PDF) SIMPLE IRA Plans for Small Businesses
• Pub. 4587 (PDF) Payroll Deduction IRAs for Small Businesses
• Pub. 4806 (PDF) Profit Sharing Plans for Small Businesses
• Pub. 4484 (PDF) Choose a Retirement Plan for Employees of Tax Exempt and Government Entities

Watch the webinar, Retirement Plans for Small Employers and Self-Employed, on the IRS Video portal.

Multiemployer Plans Receiving PGBC Assistance

Notice 2021-38 (PDF) provides guidance under the American Rescue Plan Act of 2021 about the special assistance paid by the Pension Benefit Guaranty Corporation to eligible multiemployer defined benefit plans that are financially at risk.