Does a Solo 401(k) Need to File Form 5500-EZ?

A solo 401(k) must file Form 5500-EZ once total assets across all one-participant plans sponsored by the same employer exceed $250,000 on the last day of the plan year, and it must file a final return in the year the plan terminates regardless of asset size. Below that threshold, and outside a termination year, no filing is required. Those are the solo 401(k) Form 5500-EZ filing requirements in short; the details below cover how the threshold is measured, the deadline, extensions, penalties, and what changes if you hire employees.

When a Solo 401(k) Has to File

The trigger is a dollar figure measured once a year. If your plan holds more than $250,000 in total assets on the last day of your plan year, you file Form 5500-EZ for that year.¹ For a calendar-year plan, that measurement date is December 31. The $250,000 threshold is not indexed for inflation and has held steady since the Pension Protection Act of 2006 set it.

Everything inside the plan trust counts toward the number: cash, stocks, mutual funds, bonds, real estate, cryptocurrency, promissory notes from participant loans, and any other property. Unrealized gains count too. If your investments appreciated but you have not sold, that growth still pushes toward the threshold.² Plans holding real estate, cryptocurrency, or partnership interests need a reasonable fair-market valuation as of the last day of the plan year. For a partnership interest, report the actual value of the interest rather than the figure that appears on a K-1.

Aggregation Across Multiple Plans

Here is where owners of more than one plan get caught. If you sponsor multiple one-participant plans through the same business or related businesses, you combine assets across all of them for the threshold test. A solo 401(k) holding $200,000 alongside a separate one-participant profit-sharing plan holding $53,000 puts the combined total over $250,000, and a Form 5500-EZ is due for each plan, including the smaller one.¹

The Obligation Resets Each Year

You test the threshold independently every plan year. If your combined assets exceeded $250,000 last December but a market drop brought you to $230,000 by the end of this plan year, no filing is required for the current year. The exemption reappears whenever combined assets fall to $250,000 or less at year-end.²

The Termination-Year Exception

Closing the plan overrides the threshold. When you terminate a solo 401(k), a final Form 5500-EZ is due for that year even if assets never came close to $250,000.¹ Check box A(3) on the return to confirm that all plan assets, including any insurance or annuity contracts, have been distributed or rolled over.² The final plan year is the year in which distribution of all assets is completed, not the year you decided to terminate. The filing deadline for that final return runs from the later of the formal termination date or the date the trust was fully liquidated. This is the most commonly missed filing for small plans.

The Deadline and How to File

Form 5500-EZ is due on the last day of the seventh month after the plan year ends. For a calendar-year plan, that is July 31.³ The filing authority sits in IRC Section 6058, which requires employers maintaining deferred compensation plans to report annually on the plan’s financial condition.⁴

Paper Filing

Paper returns go to the Department of the Treasury, Internal Revenue Service, Ogden, UT 84201-0020.² Use certified mail or an IRS-designated private delivery service so you have proof of the mailing date. Without that proof, a dispute over timely filing becomes your word against a processing lag.

Electronic Filing

Since January 1, 2021, Form 5500-EZ can be filed electronically through the Department of Labor’s EFAST2 system. One-participant plans must use Form 5500-EZ itself; the older workaround of filing a 5500-SF with the one-participant box checked is no longer available.⁵ Electronic filing produces an immediate confirmation receipt.

For plan years beginning on or after January 1, 2025, electronic filing is mandatory if you are required to file at least 10 returns of any type with the IRS during the calendar year. That count sweeps in W-2s, 1099s, your income tax return, employment tax returns, and excise tax returns, so a solo business owner issuing even a handful of 1099s to contractors can cross the threshold.² Below 10 returns, paper filing remains available.

Extensions

Two ways exist to buy more time, and you can only use one.

The first is automatic. If your plan year matches your business’s tax year and you have already received an extension on your federal business income tax return, the 5500-EZ deadline extends to that same date. No separate form is needed. Check the “automatic extension” box on the return and keep a copy of the business tax extension with the plan’s records.²

The second is Form 5558, filed before the original due date. A properly completed 5558 is automatically approved and pushes the deadline to the 15th day of the third month after the normal due date, moving a calendar-year plan from July 31 to October 15.⁶ You cannot stack the two. Using the automatic extension tied to the business return closes the door on a later Form 5558.²

What Goes on the Form

Form 5500-EZ is the designated annual return for one-participant plans, meaning plans that cover only a business owner, or the owner and spouse, with no common-law employees.⁷ The return calls for:

Plan name and the three-digit plan number (typically 001 for a first plan)
The sponsoring employer’s EIN, not your Social Security number
The plan’s original effective date
Total plan assets at the beginning and end of the plan year
Participant count, usually one, or two if your spouse participates

Financial figures should match the year-end statements from the brokerage or custodian holding the plan’s assets. The plan administrator or employer-owner signs and dates the form.² Keep copies of completed returns and the account statements behind them.

Penalties and the Late Filer Relief Program

The IRS charges $250 per day for a late Form 5500-EZ, up to $150,000 per return. The SECURE Act of 2019 set this structure under IRC Section 6652(e).⁸ At that rate, a single month of delay reaches $7,500. Multiple plans with multiple missed years compound quickly.

If you missed a filing and have not yet received a CP 283 penalty notice for that year, a permanent relief program under Revenue Procedure 2015-32 lets you catch up for $500 per delinquent return, capped at $1,500 per plan.⁸ To use it:

Prepare a paper Form 5500-EZ for each delinquent year, using the version of the form current for that plan year.
Check Box D for the IRS Late Filer Penalty Relief Program. On older forms without Box D, write in red at the top: “Delinquent Return Filed under Rev. Proc. 2015-32, Eligible for Penalty Relief.”
Attach Form 14704 as the transmittal schedule on top of the submission.
Include a check payable to “United States Treasury” for $500 per return, capped at $1,500 per plan.
Mail the package. Electronically filed returns are not eligible.

The program covers non-ERISA plans only. A solo 401(k) covering just the owner, or owner and spouse, with no common-law employees is typically not subject to Title I of ERISA and qualifies. Once employees bring the plan under ERISA, catch-up filings run through the Department of Labor’s Delinquent Filer Voluntary Compliance Program instead.⁸

When You Hire an Employee

The 5500-EZ track only applies while the plan is a one-participant plan. Once a common-law employee meets your plan’s eligibility requirements, the plan is no longer one-participant. Eligible employees must be included, deferrals become subject to nondiscrimination testing unless the plan uses a safe harbor design, and the plan falls under Title I of ERISA.⁷ The filing changes with it: you file the full Form 5500 or Form 5500-SF through EFAST2, and the $250,000 exemption disappears. An annual return is due regardless of asset size, and ERISA fiduciary duties attach.⁹ If your business is heading toward its first hire, expect the compliance picture to change before that hire lands.

1
Internal Revenue Service. Financial Advisors Are Assets in Your Clients One Participant Plans More Than 250000
2
Internal Revenue Service. Instructions for Form 5500-EZ
3
Internal Revenue Service. Form 5500 Corner
4
Office of the Law Revision Counsel. 26 USC 6058 – Information Required in Connection With Certain Plans of Deferred Compensation
5
U.S. Department of Labor. Form 5500 Series
6
Internal Revenue Service. Form 5558 – Application for Extension of Time to File Certain Employee Plan Returns
7
Internal Revenue Service. One Participant 401k Plans
8
Internal Revenue Service. Penalty Relief Program for Form 5500-EZ Late Filers
9
U.S. Department of Labor. FAQs About Retirement Plans and ERISA