IRS Offers Form 5500 Deadline Relief for Taxpayers with Filing Deadlines Before July 15, Provides No Relief for Many

Amidst the Coronavirus pandemic and resulting business disruption, many employers have been concerned about meeting the Form 5500 filing deadline for their retirement and health and welfare benefit plans. Jointly developed by the IRS, Department of Labor, and Pension Benefit Guaranty Corporation, the Form 5500 returns are intended to satisfy to satisfy annual reporting requirements under ERISA and the Internal Revenue Code for employee benefit plans. For calendar year employee benefit plans, the Form 5500 filing or plan annual report is generally due on July 31 (i.e., the last day of the seventh month after the tax year ends). Most employers file a Form 5558, which allows for a 2½-month extension of the Form 5500 deadline (i.e., until October 15 for a calendar-year plan).

Last month, the President issued an emergency declaration under the Robert T. Stafford Disaster Relief and Emergency Assistance Act in response to the ongoing Coronavirus pandemic (the “Emergency Declaration”). The Emergency Declaration instructed the Secretary of Treasury, pursuant to Code Section 7508A, to offer relief from certain tax deadlines to Americans who have been adversely impacted by Coronavirus. Code Section 7508A provides the Secretary of Treasury with the authority to postpone the time (generally, for up to one year) for compliance with taxpayer internal revenue laws. Following the President’s Emergency Declaration, the IRS issued IRS Notice 2020-17, which extended the taxpayer deadline from April 15, 2020 to July 15, 2020 for filing Federal income tax returns and making federal income tax payment.

IRS Notice 2020-23 (the “Notice”) further amplifies the extension of upcoming tax deadlines by providing relief to taxpayers with a filing or payment deadline falling on or before April 1, 2020 and before July 15, 2020 (the “Filing Relief Period”). The Notice provides expanded Coronavirus relief for numerous tax-related activities, including the deadline extension for quarterly estimated tax payments and IRA and employer plan rollovers. While this new extension is welcome relief for tax filers with, for example, a June 30 plan-year end and an extended April 15 deadline (i.e., the original January 31 deadline with a 2 ½-month extension), the Notice provides no deadline relief for employee benefit plans with a quickly-approaching July 31 tax filing (i.e., Form 5500) deadline.

Which Form Filing Dates Are Extended Under the Notice?

The extension applies to individuals, trusts, estates, corporations, exempt organizations, and any other non-corporate tax filers with a federal tax payment obligation or tax return filing obligation that is due (originally or pursuant to an extension) during the Relief Period. The extension includes the following filing and payment obligations:
  • Individual income tax payments and return filings on Form 1040 (including Forms 1040-SR, 1040-NR, 1040-NR-EZ, 1040-PR, and 1040-SS);
  • Calendar or fiscal year corporate income tax payments and return filings on Form 1120 (including 1120-C, 1120-F, 1120-FSA, 1120-H, 1120-L, 1120-ND, 1120-PC, 1120-POL, 1120-REIT, 1120-RIC, 1120-S, and 1120-SF);
  • Calendar or fiscal year partnership return filings on Forms 1065 and 1066, U.S. Real Estate Mortgage Investment Conduit Income Tax Return;
  • Estate and income tax payments and return filings on Form 1041 (including Forms 1041-N and 1041-QFT);
  • Estate and generation-skipping transfer tax payments and return filings on Form 706 (including Forms 706-NA, 706-A, 706-QDT, 706-GS(T), 706-GS(D), and 706-GS(D)1;
  • Form 706, Estate (and Generation-Skipping Transfer) Tax Return;
  • Form 8971, Information Regarding Beneficiaries Acquiring Property from a Decedent and any supplemental Form 8971;
  • Gift and generation-skipping transfer tax payments and return filings on Form 709 (including Forms 706 and 706-NA);
  • Estate tax payments of principal or interest due as a result of an election made under Code Sections 6166, 6161, or 6163;
  • Exempt organization business income tax and other payments and return filings on Form 990-T (and proxy tax under Code Section 6033(e));
  • Excise tax payments on investment income and return filings on Form 990-PF and excise tax payments and return filings on Form 4720;
  • Quarterly estimated income tax payments calculated on or submitted with Forms 990-W, 1040-ES, 1040-ES (NR), 1040-ES (PR), 1041-ES, and 1120-W.
The IRS clarified that the relief provided by the Notice extends not just the filing of the specified forms but also the accompanying schedules, returns, and other attachments required to be filed by the due date of the specified forms. The relief also applies to any installment payments due during the Filing Relief Period. Elections required to be made on a timely filed specified form are considered timely made if filed on such specified form by July 15, 2020.

What are Other Considerations/Impact of This New Relief?

The Notice also indirectly extends the 60-day rollover rule for individual retirement accounts until July 15 for distributions taken earlier in the year.  While the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) waived 2020 required minimum distributions (RMDs), the waiver did not apply until the CARES Act effective date (or March 27). By this date, many individuals had already taken their IRA and plan RMDs. Generally, participants can return funds back to a plan or IRA if they are within 60 days of receiving the distribution (i.e., a “60-day rollover”). The 60-day rollover window has already passed for those participants who took RMDs from their company plans or IRAs in January. However, for those individuals who recently took an RMD (i.e., February 1 or later), they should be allowed to return these funds through July 15. The deadline relief provided in the Notice, however, does not apply to non-spouse beneficiaries (who are not permitted to do a 60-day rollover).

How Do Taxpayers Claim Relief Under the Notice?

Relief pursuant to the Notice is automatic. Consequently, those taxpayers with a deadline during the Relief Period are not required to contact the IRS or file any extension forms. They also are not required to send letters or other documents to receive this relief. Those taxpayers who need additional time to file may choose to file the appropriate extension form by July 15, 2020.

If you have questions regarding your Form 5500 deadline, or if you need assistance filing your Form 5500, contact David Hall today at 470-571-1007. We are available and well-equipped to help with all manner of ERISA and employee benefits legal compliance questions. If you need assistance navigating the impacts of COVID-19 to employee benefits plan legal compliance, we have a multitude of resources available on our website, www.hallbenefitslaw.com

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Hall Benefits Law, LLC

HBL offers employers comprehensive legal guidance on benefits in mergers and acquisitions, Employee Stock Ownership Plans (ESOPs), executive compensation, health and welfare benefits, healthcare reform, and retirement plans. We counsel a wide spectrum of clients including small, mid-sized, and large companies, 401(k) investment advisors, health insurance brokers, accountants, attorneys, and HR consultants, just to name a few. HBL is passionate about advising clients, and we are dedicated to our mission: to provide comprehensive, personalized, and practical ERISA and benefits legal solutions that exceed client expectations.

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