On June 24, 2016, the IRS issued a draft version of the Form 5300, Application for Determination for Employee Benefit Plan.
Form 5300 is used to request a favorable determination letter (DL) from the IRS on the qualified status of these retirement plans and the exempt status of any related trust:
- individually designed defined contribution plans (for example, 401(k), profit sharing)
- individually designed defined benefit plans (for example, traditional defined benefit, cash balance)
In certain circumstances, plan sponsors may file an application for a determination letter for a pre-approved Master & Prototype or Volume Submitter plan on Form 5300.
Form 5300 has undergone major revisions in format and information required. Many of the revisions reflect the changes affecting individually designed plans described in Announcement 2015-19, and Revenue Procedure 2016-37 including, effective January 1, 2017:
- Eliminating 5-year remedial amendment cycles
- Generally, limiting DL requests to:
- initial plan qualification;
- qualification on plan termination; and
- other circumstances, to be determined annually (no additional circumstances apply for applications in calendar year 2017)
The revised form significantly simplifies the information plan sponsors must provide and is expected to reduce the taxpayer burden in filling out the form.
We anticipate the final version of Form 5300 will be available January 2017.
If you wish, you can submit comments about the draft Form 5300.