As of June 2022, the IRS updated two of its forms Form 5300, “Application for Determination for Employee Benefit Plan” , Form 8717, “User Fee for Employee Plan Determination Letter Request” and related instructions in connection with its determination letter program for qualified retirement plans, including 401(k) plans. The updates are required as of July 1, 2022, due to the move to required all-electronic filing of Form 5300, which the IRS announced on May 25, 2022 on its “Employee Plans News” website.
Background. Qualified retirement plans, including 401(k) plans, are subject to many Federal laws, regulations, governmental agency rulings, and related requirements. Although not legally required, to ensure that a 401(k) plan document meets each of the qualification requirements of the Internal Revenue Code, plan sponsors typically file an application with the IRS, requesting the IRS to review the document and issue a favorable determination letter as to the plan’s qualified status. (See our reference article for more information.)
Filing a determination letter request is a complex and often difficult process generally undertaken by a plan’s ERISA counsel, third-party administrator, or other professional. Full details of the current requirements for determination letter submissions (including the new all-electronic filing requirements) are contained in Revenue Procedure 2022-4
Mandatory Filing as of July 1, 2022. Whereas determination letter submissions have traditionally been filed on paper, electronic filing became available as of June 1, 2022 and is now mandatory as of July 1, 2022.
Highlights of changes are as follows (non-exhaustive list):
- IRS Form 5300 is no longer available through the IRS forms and publications database. Potential filers are instead directed to the government’s gov website, through which filing must be made.
- Since gov can only accommodate one uploaded file, all attachments must be consolidated into a single PDF file which cannot exceed 15 MB.
COMMENT: Since most of the information required to be submitted in support of a determination letter request is in the form of various attachments – many of which can be large and complex, particularly in the case of large plans, individually designed plans, or plans having unusual features – it is conceivable that the uploading size limit could present a practical problem. (A glance through the Form 5300 Instructions gives an idea of the substantial amount of information that must be provided.)
The Form 5300 instructions state that, if the PDF file exceeds the 15MB limit, the filer should contact IRS Customer Accounts Services for assistance on how to submit any items that must be removed because they exceed the limit. Interestingly, the Employee Plan News website suggests that such additional documents may be submitted via fax.
- Importantly, a Form 8717, “User Fee for Employee Plan Determination Letter Request,” is generally not required for submissions made through gov, as the user fee is paid along with the form submission. (A note on the revised Form 8717 confirms this.)
- However, the Form 5300 instructions clarify that in the case of certain determination letter requests made in connection with partial plan terminations, a separate Form 8717 could be necessary.
DISCLAIMER: This article is intended only as a brief overview of the new IRS forms with respect to the new mandatory IRS electronic filing requirements for determination letter requests for 401(k) plans. It is not intended to address the details of 401(k) plan qualification, determination letter requests generally, other legal requirements for plans, or similar topics. As always, please consult your own ERISA attorney or advisor for individualized advice concerning your own 401(k) plan.
The information and content contained in this blog post are for general informational purposes only, and does not, and is not intended to, constitute legal advice. As always, for specific questions concerning your 401(k) retirement plan, or for help in operating your plan during the current COVID-19 crisis, please consult your own ERISA attorney or professional advisor.