IRS Form 5305 is a pre-approved model agreement that establishes a Traditional IRA structured as a trust account. You sign it with your trustee to create the account, and both sides keep it in their records. It is not a tax form you file with the IRS. The 5305 designation also anchors a wider family of model agreements covering Roth IRAs, SEP and SIMPLE plans, health savings accounts, and Coverdell education accounts, so picking the right variant matters more than filling out the original.
Why the Form Exists
Every tax-advantaged retirement account needs a written governing document that satisfies specific requirements in the Internal Revenue Code. Section 408(a) sets out what a Traditional IRA trust agreement must contain: the trustee must be a bank or IRS-approved entity, funds cannot be invested in life insurance, the owner’s interest is always fully vested, and account assets cannot be mixed with non-IRA property.1Office of the Law Revision Counsel. 26 USC 408 – Individual Retirement Accounts Drafting a custom document that checks every box is expensive.
The 5305 series solves that. Each form contains IRS-approved language that already meets the statutory requirements for its specific account type. Adopting a 5305-series form lets you skip submitting a custom plan document and requesting a determination letter. The language has already been blessed.
None of these forms get filed. You execute the agreement with your trustee or custodian, both parties keep a copy, and the IRS never sees the completed document unless it audits the account later.2Internal Revenue Service. Form 5305 – Traditional Individual Retirement Trust Account
Picking the Right 5305 Form for Your Account
Two variables decide which form you need: the type of account (Traditional IRA, Roth, SEP, SIMPLE, HSA, or Coverdell) and whether the assets sit in a trust or a custodial structure. Using the wrong form creates a compliance problem later.
Traditional IRA: Form 5305 or 5305-A
Form 5305 establishes a Traditional IRA as a trust account, with a trustee holding the assets under Section 408(a).2Internal Revenue Service. Form 5305 – Traditional Individual Retirement Trust Account Form 5305-A establishes the same account as a custodial arrangement, where the custodian manages the assets without taking on trustee duties.3Internal Revenue Service. Form 5305-A – Traditional Individual Retirement Custodial Account Most brokerages and banks use the custodial structure, so 5305-A is the form individual investors see most often.
Roth IRA: Form 5305-R or 5305-RA
Roth IRAs are governed by Section 408A, a separate part of the code with its own rules on contributions, income limits, and tax-free distributions.1Office of the Law Revision Counsel. 26 USC 408 – Individual Retirement Accounts4Internal Revenue Service. Form 5305-R – Roth Individual Retirement Trust Account5Internal Revenue Service. Form 5305-RA – Roth Individual Retirement Custodial Account Form 5305-RB exists for Roth IRAs written as annuity contracts but is far less common.
SEP: Form 5305-SEP
A Simplified Employee Pension lets an employer contribute directly to employees’ Traditional IRAs. Form 5305-SEP is the model plan document for this arrangement. Employers can also use a prototype from a financial institution or an individually designed agreement, but 5305-SEP is the simplest path because the language is pre-approved.6Internal Revenue Service. SEP Plan Overview
One boundary: Form 5305-SEP cannot be used for a SEP that allows employee salary-reduction contributions. A plan with those features needs Form 5305A-SEP or a non-model document.7Internal Revenue Service. Form 5305-SEP – Simplified Employee Pension Individual Retirement Accounts Contribution Agreement Each employee separately opens a Traditional IRA on Form 5305 or 5305-A to receive the contributions.
SIMPLE IRA: Two Documents, Not One
A SIMPLE plan needs both a plan-level document and an account-level document, and mixing them up is a common mistake.
- Form 5305-SIMPLE is the employer’s plan adoption agreement, signed by the employer and the designated financial institution.8Internal Revenue Service. Form 5305-SIMPLE – Savings Incentive Match Plan for Employees of Small Employers (SIMPLE)
- Form 5305-S is the individual trust account for each employee’s SIMPLE IRA, governed by Sections 408(a) and 408(p).9Internal Revenue Service. Form 5305-S – SIMPLE Individual Retirement Trust Account
- Form 5305-SA is the custodial version of the individual SIMPLE IRA, used instead of 5305-S when the institution acts as custodian rather than trustee.
HSA and Coverdell: Forms 5305-B, 5305-C, 5305-E, and 5305-EA
The series extends past retirement accounts. Form 5305-B sets up a Health Savings Account as a trust, and Form 5305-C does the same as a custodial account.10Internal Revenue Service. Form 5305-B – Health Savings Trust Account11Internal Revenue Service. Form 5305-C – Health Savings Custodial Account Forms 5305-E and 5305-EA cover Coverdell Education Savings Accounts in trust and custodial form.
Completing and Signing the Agreement
For an individual IRA, the account owner supplies name, address, Social Security number, and date of birth. The trustee or custodian supplies its institutional details. Both parties sign, and the account exists legally as of the effective date on the form.
Beneficiary designation is part of executing any 5305-series form, either on the document itself or on an attached schedule. This designation controls who inherits the account and overrides whatever a will says about the same money. Revisit it after marriage, divorce, or the birth of a child.
For employer plans, the steps expand. With Form 5305-SIMPLE, the employer and the designated financial institution sign the plan document, and every eligible employee must receive written notice of the plan’s terms, including the employer’s chosen contribution formula.12Internal Revenue Service. SIMPLE IRA Plan With a SEP, the employer completes Form 5305-SEP and each employee then opens their own Traditional IRA to receive contributions.
What the Signed Agreement Locks In
The model agreements build key tax-code restrictions directly into the contract. Trust accounts under Form 5305 and Form 5305-R cannot hold life insurance contracts or collectibles, with narrow exceptions for certain gold, silver, and platinum coins and bullion.4Internal Revenue Service. Form 5305-R – Roth Individual Retirement Trust Account Account assets cannot be commingled with non-IRA property except in a common trust fund or common investment fund.1Office of the Law Revision Counsel. 26 USC 408 – Individual Retirement Accounts
Distribution timing follows the same statutory pattern. Traditional IRA owners must begin taking required minimum distributions by April 1 of the year after they turn 73.13Internal Revenue Service. Publication 590-B (2025) – Distributions from Individual Retirement Arrangements Roth IRAs have no RMDs during the owner’s lifetime.
2026 Contribution Limits
The agreement creates the account; the contribution limits keep it in good standing.
- Traditional and Roth IRAs: $7,500 per year, or $8,600 if you are 50 or older, reflecting a $1,100 catch-up amount for 2026.14Internal Revenue Service. 401(k) Limit Increases to $24,500 for 2026, IRA Limit Increases to $7,500
- SIMPLE IRAs: employees can defer up to $17,000, or $21,000 at age 50 or older, with a $4,000 catch-up.15Internal Revenue Service. Retirement Topics – SIMPLE IRA Contribution Limits
- SEP IRAs: the employer can contribute the lesser of 25% of an employee’s compensation or the annual dollar limit. A standard SEP has no employee deferral.7Internal Revenue Service. Form 5305-SEP – Simplified Employee Pension Individual Retirement Accounts Contribution Agreement
SIMPLE plans also carry a mandatory employer contribution each year: either a dollar-for-dollar match on employee deferrals up to 3% of compensation, or a flat 2% non-elective contribution for every eligible employee whether they defer or not.12Internal Revenue Service. SIMPLE IRA Plan
Recordkeeping and Fixing Mistakes
Keep the signed agreement indefinitely. The IRS can request it during an audit, and without it, proving the account was properly established is much harder. Your trustee or custodian handles the annual side of IRS reporting, filing Form 5498 to report contributions, rollovers, year-end fair market value, and any RMD due for the next year, and sending you a copy.16Internal Revenue Service. Instructions for Forms 1099-R and 5498 (2025)
Real trouble starts when the account operates outside the signed terms: exceeding contribution limits, holding prohibited investments, missing RMDs. If the plan drifts out of compliance, the IRS offers correction pathways through the Employee Plans Compliance Resolution System, and correction is almost always cheaper than the worst outcome, which is losing the account’s tax-advantaged status entirely.17Internal Revenue Service. Correcting Plan Errors Reviewing the signed model agreement once a year against actual account activity is the simplest way to catch problems while they are still small.