IRS Form 5330 is the return used to report and pay excise taxes on certain retirement plan transactions and failures. While it's far less well-known than Form 5500, it carries serious penalties for late or non-filing — and the IRS has been actively increasing enforcement.
Who Must File?
Form 5330 is filed by employers, plan sponsors, disqualified persons, or entity managers who owe excise taxes under one or more IRC sections. The most common filers are:
- Plan sponsors who made late deposits of participant 401(k) contributions (§ 4975)
- Plan sponsors whose plan failed ADP or ACP nondiscrimination testing (§ 4979)
- Employers who contributed more than the § 404 deductible limit (§ 4972)
- Employers who received a reversion of plan assets on termination (§ 4980)
The 12 IRC Sections Covered
Form 5330 actually covers excise taxes under 12 different IRC sections, including §§ 4965, 4971, 4972, 4973(a)(3), 4975, 4976, 4977, 4978, 4979, 4979A, 4980, and 4980F. The four sections above account for the large majority of real-world filings.
When Is It Due?
The due date depends on which IRC section applies — there is no single universal due date for Form 5330:
- § 4975 (prohibited transactions): Last day of the 7th month after the tax year end. For a December 31 year: July 31.
- § 4979 (ADP/ACP failures): Last day of the 15th month after the plan year end. For a December 31 plan year: March 15 of the following year.
- § 4972 (nondeductible contributions): Last day of the 7th month after the tax year end.
- § 4980 (plan asset reversion): Last day of the month following the month of reversion.
Can You Get an Extension?
Yes. Form 8868 filed on or before the original due date grants up to 6 months. Importantly, the extension is to file — not to pay. The excise tax must be paid by the original due date to avoid late payment penalties and interest. Form 5558 is no longer used for Form 5330 extensions as of 2024.
What Are the Penalties for Not Filing?
The late filing penalty is 5% of the unpaid excise tax per month (or fraction of a month), up to 25%. A separate late payment penalty of 0.5% per month applies to any unpaid tax. Interest accrues from the original due date regardless of reasonable cause.
Given the complexity of due dates and the multiplier effect of penalties on top of the underlying excise tax, timely filing is critical. Always consult a qualified ERPA or tax attorney before filing.