final 5500-EZ for Solo 401K

[spc33907]

Hi,

I terminated my Solo 401k on Jan 5, 2023 and rolled it over to my traditional IRA.
I know I have to file a 5500-EZ for 2022 by July 31, 2023.
Regarding the final 5500-EZ form, the 3rd party administrator for my Solo 401K says they will issue a 1099-R in the beginning of 2024 and after that only I should file the final 5500-EZ.
But I read on this forum that I need to file a final 5500-EZ by the end of the 7 months after termination (i.e. by Aug 31, 2023)?
Is the 3rd party administrator wrong?

Thanks,
Sudhir

[MP123]

Is the 3rd party administrator wrong?

I believe so.

The 5500-EZ is due by the last day of the seventh month following the end of the short plan year. The short plan year ends when the all of the assets are distributed. In your case the 5500-EZ would be due August 31, 2023. If you wait until 2024 to file 5500-EZ you will be subject to very high late filing fees for the months it was late.

I think you should double check with the TPA to understand their reasoning. The late fees are $250/day, up to $150,000.

[cowdogman]

What may be going on here is the common confusion between emptying the account and terminating the plan.

I would ask the TPA for the date the PLAN was terminated. If the answer is 1/5/23 then you need to file this year--no reason not to file now.

If the TPA says the plan will be terminated as of 12/31/23 then I would ask the TPA under what provision of the Plan was the rollover allowed.

[MP123]

If the TPA says the plan will be terminated as of 12/31/23 then I would ask the TPA under what provision of the Plan was the rollover allowed.

This is a key question. Generally, if OP is under age 59.5 in-service distributions aren't permitted. This would leave plan termination as the only way of rolling funds out of the solo401k, meaning it was terminated 1/5/2023. It's possible that this plan permits some other exceptions though.

[nextuszerodmd]

I am in a similar situation. I terminated my solo 401k February 8th 2023 through Vanguard.

1) Do I file a 5500-EZ for 2022 before July 2023?

Then,

2) File a form FINAL 5500-EZ in 2024 for termination in 2023 or do I file it sometime this year 2023?

Thanks

[cowdogman]

I am in a similar situation. I terminated my solo 401k February 8th 2023 through Vanguard.

1) Do I file a 5500-EZ for 2022 before July 2023?

Then,

2) File a form FINAL 5500-EZ in 2024 for termination in 2023 or do I file it sometime this year 2023?

Thanks

How did you "terminate your 401(k)" with Vanguard? What did you do to terminate your 401(k) plan?

I'm asking in order to determine whether you actually terminated the plan.

[nextuszerodmd]

I am in a similar situation. I terminated my solo 401k February 8th 2023 through Vanguard.

1) Do I file a 5500-EZ for 2022 before July 2023?

Then,

2) File a form FINAL 5500-EZ in 2024 for termination in 2023 or do I file it sometime this year 2023?

Thanks

How did you "terminate your 401(k)" with Vanguard? What did you do to terminate your 401(k) plan?

I'm asking in order to determine whether you actually terminated the plan.

I called and told them to terminate the plan and to distribute the funds to our traditional IRA

they told me thats it's standard practice to have the account "visible" on our account login for "5 years" even though its closed.

[toddthebod]

I am in a similar situation. I terminated my solo 401k February 8th 2023 through Vanguard.

1) Do I file a 5500-EZ for 2022 before July 2023?

Then,

2) File a form FINAL 5500-EZ in 2024 for termination in 2023 or do I file it sometime this year 2023?

Thanks

How did you "terminate your 401(k)" with Vanguard? What did you do to terminate your 401(k) plan?

I'm asking in order to determine whether you actually terminated the plan.

I called and told them to terminate the plan and to distribute the funds to our traditional IRA

they told me thats it's standard practice to have the account "visible" on our account login for "5 years" even though its closed.

You file a 5500-EZ for 2022 by the end of July 2023 if the assets in the plan exceeded $250,000 on 12/31/22. You file a final 5500-EZ by the end of September no matter how much assets the plan held, checking the boxes for final submission and short plan year. (I'm not 100% sure on the deadline for a mid-month termination, so don't wait until September.)

[cowdogman]

I called and told them to terminate the plan and to distribute the funds to our traditional IRA

they told me thats it's standard practice to have the account "visible" on our account login for "5 years" even though its closed.

OK. You as the plan sponsor/administrator can terminate the plan. Vanguard as trustee cannot. Telling Vanguard to terminate the plan does nothing--Vanguard probably understands it as you telling it the plan has been terminated.

I suggest you prepare a one page statement that says something like "I, as plan sponsor/administrator, hereby terminate the 401(k) plan called [name you gave your plan] effective on [date you told Vanguard the plan was terminated]." Date and sign the statement and then add it to your important tax files.

Assuming the 401(k) account balances are now zero, you should file ASARP the final 5500-EZ for a short plan year--1/1/2023 to the date of termination.

There are lots of threads on this forum about how to fill out the final 5500-EZ. One key element is that the end of (short) plan year assets should be zero.

Edit: A common mistake is to confuse the account with the plan. They are two different things. The account is established under the plan. The plan is administered by the plan administrator. The account is managed by the participant. And yes, the account will stay on Vanguard's site even tho it has a zero balance and the plan has been terminated. I have been told it stays on for 7 years.

Do not be tempted to contribute more money to the account--given that the account remains on Vanguard's site and you will likely still be able to log into the Vanguard plan administrator site. The plan is terminated.

[cowdogman]

You file a 5500-EZ for 2022 by the end of July 2023 if the assets in the plan exceeded $250,000 on 12/31/22. You file a final 5500-EZ by the end of September no matter how much assets the plan held, checking the boxes for final submission and short plan year. (I'm not 100% sure on the deadline for a mid-month termination, so don't wait until September.)

Not sure I follow this. 5500-EZ is due 7 months after end of plan year if assets over $250,000 or it is the final plan year.

So, if the OP's plan had $250,000 in it on 12/31/2022, then he should file a 5500-EZ for the 2022 plan year by July 31, 2023.

In any case, he should file a 5500-EZ for the short 2023 plan year within 7 months of the end of the short plan year (not sure where September comes from).

[toddthebod]

So, if the OP's plan had $250,000 in it on 12/31/2022, then he should file a 5500-EZ for the 2022 plan year by July 31, 2023.

You file a 5500-EZ for 2022 by the end of July 2023 if the assets in the plan exceeded $250,000 on 12/31/22.

In any case, he should file a 5500-EZ for the short 2023 plan year within 7 months of the end of the short plan year (not sure where September comes from).

You file a final 5500-EZ by the end of September no matter how much assets the plan held, checking the boxes for final submission and short plan year.

September is 7 months after February:

I terminated my solo 401k February 8th 2023 through Vanguard.

[cowdogman]

So, if the OP's plan had $250,000 in it on 12/31/2022, then he should file a 5500-EZ for the 2022 plan year by July 31, 2023.

You file a 5500-EZ for 2022 by the end of July 2023 if the assets in the plan exceeded $250,000 on 12/31/22.

In any case, he should file a 5500-EZ for the short 2023 plan year within 7 months of the end of the short plan year (not sure where September comes from).

You file a final 5500-EZ by the end of September no matter how much assets the plan held, checking the boxes for final submission and short plan year.

September is 7 months after February:

I terminated my solo 401k February 8th 2023 through Vanguard.

Thanks. Sorry, I was thinking of the OP's January 5th termination.

If the plan was terminated on February 8th, 2023, then the filing deadline is September 8th, 2023. If the plan assets are now zero, nextuszerodmd should file ASARP.

[spc33907]

Thanks everyone for replying to my query. I know I had said that there is a TPA. But let me correct it by saying that they are not the administrator of the plan. Actually I am only the administrator. Initially they helped me set up  the non-protoype plan and every year they also provide help on any administrative tasks such as filling out a 5500-EZ form or issuing a 1099-R when there is a distribution from the plan etc.

I talked to the company's compliance officer again regarding the final 5500-EZ form. He said that for a single participant plan, the IRS considers the plan terminated only when a 1099-R (showing all the assets) is issued. His company will issue a 1099-R in Jan 2024 and I will have to file a final 5500-EZ form by July 31, 2024. They will provide me with help on completing the 5500-EZ form.
He said that if I rollover the plan assets into a traditional IRA in Jan 2023 doesn't mean the plan is terminated in Jan 2023. IRS allows such a rollover when a participant is 59 or older or a participant is no longer employed by the plan sponsor or the plan sponsor itself is being shut down which is true in my case as I had terminated the business in Dec 2022.

So when 1099-R is issued in Jan 2024, IRS will consider the plan terminated as of the end of 2023 and the requirement is to file a final 5500-EZ by July 31, 2024. He mentioned that he has been in compliance for more than a decade and he is very sure of the rules regarding final 5500-EZ.

When I asked him about what would be the downside of me filing a final 5500-EZ by Aug 31, 2023, he said if I do that then the IRS will be confused if they see it without any record of a 1099-R showing a full distribution. So he strongly recommends against it.

- Sudhir

[HomeStretch]

I disagree with the advice you were given by the TPA compliance officer. I agree with MP123’s post (the first response to your original post) about the deadline for your Form 5500-EZ. This assumes the plan assets were fully distributed via rollover in Jan. 2023.

Best of luck.

[toddthebod]

The plan is terminated when the assets are distributed, not when you get a 1099.

[MP123]

So when 1099-R is issued in Jan 2024, IRS will consider the plan terminated as of the end of 2023 and the requirement is to file a final 5500-EZ by July 31, 2024. He mentioned that he has been in compliance for more than a decade and he is very sure of the rules regarding final 5500-EZ.

Respectfully, I don't think there is any substantial authority for this position.

The instructions for 5500 series forms are clear that they must be filed by the last day of the 7th month following the distribution of the plan assets, not following the filing of a 1099-R.

What if the TPA never files 1099-R? Or files it late? It's not even clear what the relevant date would be with this approach, filing date by the TPA, received by IRS, due date of the 1099-R, or what?

As I mentioned upthread the penalties for a late 5500 are severe. I think that if you follow this TPA's advice you may be subject to these penalties for the period between distributing the plan assets and the end of the year. Perhaps he's always done it that way, but that doesn't mean he's right.

[cowdogman]

I talked to the company's compliance officer again regarding the final 5500-EZ form. He said that for a single participant plan, the IRS considers the plan terminated only when a 1099-R (showing all the assets) is issued. His company will issue a 1099-R in Jan 2024 and I will have to file a final 5500-EZ form by July 31, 2024. They will provide me with help on completing the 5500-EZ form.

I don't think the above is right. I don't think it even makes sense.

The 2023 1099-R will show a distribution. It will not show the balance of the account after the distribution ($0 or otherwise) and will not indicate whether the plan was terminated (which is something that the issuer of the 1099-R has no independent knowledge of). There will be nothing in the 1099-R for the IRS to "consider the plan terminated." And it's bizarre to think that someone at the IRS "considers" these things at all.

The plan is terminated when you as plan sponsor terminate the plan. The IRS knows the plan is terminated when you submit a final 5500-EZ.

Here's the language from the form of the current Vanguard plan:

The Plan may be terminated by the Adopting Employer at any time by appropriate action of its managing body. Such termination will be effective on the date specified by the Adopting Employer.

If your plan assets are zero (which I think you said above), you, as plan sponsor, can terminate the plan at any time (see my instructions in a post above) and file a 5500-EZ.

It may be that compliance officer is assuming that you will terminate the plan effective 12/31/2023--which you can do. But I see no reason to wait.

Good luck.

[cowdogman]

The instructions for 5500 series forms are clear that they must be filed by the last day of the 7th month following the distribution of the plan assets, not following the filing of a 1099-R.

I believe the final 5500-EZ is due by the last day of the 7th month after the final plan year. The final plan year is the year in which all of the assets of the plan have been distributed. I do not believe the distribution of the assets triggers the seven-month filing requirement; the last day of the plan year triggers the seven-month filing requirement.

So, if the OP waits until 12/31/2023 to terminate the plan (which he may be able to do under his plan), then he would have until July 31, [edit} 2024.

I do completely agree that the issuance of the 1099-R is irrelevant. And I see no reason to wait until 12/31/2023 to terminate the plan (thereby abbreviating the plan year) and file the final 5500-EZ.

[HomeStretch]

OP, Form 1099-R Box 2b does contain a box for the issuer to check if it is a full distribution. However, it seems to be elective (/jk) as I can’t get E*TRADE to check the box on top of the other 1099-R corrections needed. The Form 1099-R was issued for the distribution of plan assets in connection with a Solo 401k plan termination.

If you are age 59-1/2+ and your plan allows in-service distributions, you could take the approach suggested by cowdogman to choose a termination date in late 2023 to legitimately push your filing deadline into 2024.

But why delay… Consider filing the Form 5500-EZ in 2023 as suggested here. It’s a lot easier and cheaper to respond to an IRS question about 2023 Form 5500-EZ/2024 Form 1099-R (which I don’t believe the IRS will ever send) than it is to pay the penalties for a late final Form 5500-EZ filing. The penalty is $250/day up to $150,000. There is a penalty relief program for late filers that can cap it at $500.

[cowdogman]

OP, Form 1099-R Box 2b does contain a box for the issuer to check if it is a full distribution.

There can be a total distribution without plan termination. And there can be contributions to the plan after a total distribution.

Plus I think Total Distribution refers to a total distribution for a participant, not for the plan.

I just took a look at the IRS instructions for the 1099-R and other than one reference regarding "loan offsets" there is no reference to a termination of the plan in the instructions.

I think the root of the confusion here is that the compliance officer is assuming a 12/31/2023 plan termination.

[HomeStretch]

OP, Form 1099-R Box 2b does contain a box for the issuer to check if it is a full distribution.

There can be a total distribution without plan termination. And there can be contributions to the plan after a total distribution.

Plus I think Total Distribution refers to a total distribution for a participant, not for the plan. …

Agree with you on both comments. This is the only information the IRS might see (aside from the final Form 5500-EZ) that might trigger a question about a plan termination but I don’t think the box checked on the Form 1099-R will trigger a question.

[MP123]

I believe the final 5500-EZ is due by the last day of the 7th month after the final plan year. The final plan year is the year in which all of the assets of the plan have been distributed. I do not believe the distribution of the assets triggers the seven-month filing requirement; the last day of the plan year triggers the seven-month filing requirement.

I believe the final plan year can be a short plan year which ends when the assets are distributed as part of termination:

For a plan year of less than 12 months (short plan year), insert the short plan year beginning and ending dates on the line provided at the top of the form. For purposes of this form, the short plan year ends on the date of the change in accounting period or the complete distribution of the plan's assets.

So, I'm not sure that it's possible to distribute all of the assets but not terminate the plan until year's end (to delay the 5500), but maybe.

Either way I agree the 1099-R is not relevant to the filing requirement.

[fyre4ce]

The instructions for 5500 series forms are clear that they must be filed by the last day of the 7th month following the distribution of the plan assets, not following the filing of a 1099-R.

I believe the final 5500-EZ is due by the last day of the 7th month after the final plan year. The final plan year is the year in which all of the assets of the plan have been distributed. I do not believe the distribution of the assets triggers the seven-month filing requirement; the last day of the plan year triggers the seven-month filing requirement.

So, if the OP waits until 12/31/2023 to terminate the plan (which he may be able to do under his plan), then he would have until July 31, 2023.

I do completely agree that the issuance of the 1099-R is irrelevant. And I see no reason to wait until 12/31/2023 to terminate the plan (thereby abbreviating the plan year) and file the final 5500-EZ.

Please check those dates again.

[cadreamer2015]

The plan is terminated when the assets are distributed, not when you get a 1099.

I'm not sure this is correct. I think the plan is terminated when the plan administrator sends notice to the plan participant that the plan is terminated. That may or may not coincide with when the assets in the plan are distributed. But I agree with the sentiment that a 1099 has nothing to do with the plan termination.

[cowdogman]

So, I'm not sure that it's possible to distribute all of the assets but not terminate the plan until year's end (to delay the 5500), but maybe.

A couple (probably not uncommon) scenarios:

1. A permissible in-service rollover of all amounts without plan termination. If the participant wanted to invest his/her 401(k) assets in other investments--e.g., the Vanguard solo 401(k) limits investments to Vanguard mutual funds--but also wanted to keep the plan going.

2. A withdrawal of all assets after 59.5 YO because the participant needs the money but doesn't want to terminate the plan.

The plan is not terminated until the plan is terminated by the sponsor (forgetting for a minute about fringe-type terminations like court order terminations).

[cowdogman]

The instructions for 5500 series forms are clear that they must be filed by the last day of the 7th month following the distribution of the plan assets, not following the filing of a 1099-R.

I believe the final 5500-EZ is due by the last day of the 7th month after the final plan year. The final plan year is the year in which all of the assets of the plan have been distributed. I do not believe the distribution of the assets triggers the seven-month filing requirement; the last day of the plan year triggers the seven-month filing requirement.

So, if the OP waits until 12/31/2023 to terminate the plan (which he may be able to do under his plan), then he would have until July 31, 2023.

I do completely agree that the issuance of the 1099-R is irrelevant. And I see no reason to wait until 12/31/2023 to terminate the plan (thereby abbreviating the plan year) and file the final 5500-EZ.

Please check those dates again.

Oops, July 31, 2024. I'll fix in the original. Thanks.

[MP123]

The plan is not terminated until the plan is terminated by the sponsor (forgetting for a minute about fringe-type terminations like court order terminations).

But what about cases like the OP, where plan termination is the only exception that allows the rollover. Surely the rollover is in effect termination. A written termination election should be made too, but I don't see how the plan assets could be rolled out if the plan wasn't terminated at the same time or earlier.

There would be nothing to prevent an under 59.5 participant from rolling out of the plan any time they wanted to, unless it was also terminated at the same time. And if they could roll out and delay the termination (indefinitely?) then why have the restriction?

[cowdogman]

But what about cases like the OP, where plan termination is the only exception that allows the rollover. Surely the rollover is in effect termination. A written termination election should be made too, but I don't see how the plan assets could be rolled out if the plan wasn't terminated at the same time or earlier.

There would be nothing to prevent an under 59.5 participant from rolling out of the plan any time they wanted to, unless it was also terminated at the same time. And if they could roll out and delay the termination (indefinitely?) then why have the restriction?

If a participant violates the rules of the plan (e.g., an impermissible rollover), then he has violated the plan rules and will suffer some unpleasant tax consequences. But a participant's violation of the plan rules has no impact on the plan itself--and such violations most certainly don't terminate the plan.

If your point is that the OP should take the position that he has terminated the plan and therefore the rollover was permissible, I agree. But I don't agree that the rollover terminates the plan.

I don't have the OP's plan in front of me but there may also be a right for a distribution triggered by "separation from service".

I think you and I are in agreement with what the OP should do. He should terminate the plan and file an 5500-EZ asap. If the rollover was on January 5th I would draft the termination statement along the following lines: "I, [name], as plan [sponsor/administrator], terminated the [name of plan} with effect from January 5, 2023." I would then file a 5500-EZ with a short plan year from January 1, 2023 to January 5, 2023. This course of action is consistent with what the OP intended (and going by his first post was what he thought he had done).

In my posts above I was just trying to figure out what the compliance officer was thinking, and was also trying to make the point (as I have many times before in this forum) that the account is not the plan and what the participant does with the account has no effect on the plan.

One other thing that I don't think has come up in this thread: If the adopting employer for the OP was an LLC or other legal entity, the OP should make sure he keeps it in existence until the plan is terminated.

[MP123]

I think you and I are in agreement with what the OP should do. He should terminate the plan and file an 5500-EZ asap. If the rollover was on January 5th I would draft the termination statement along the following lines: "I, [name], as plan [sponsor/administrator], terminated the [name of plan} with effect from January 5, 2023." I would then file a 5500-EZ with a short plan year from January 1, 2023 to January 5, 2023. This course of action is consistent with what the OP intended (and going by his first post was what he thought he had done).

Yes, I agree.

And, like you, I'm just trying to understand what the TPA might be thinking.

[spc33907]

OP here. As all of you have suggested, I will file a final 5500EZ by Aug 31, 2023. I am under 59 years of age, but I requested Fidelity to terminate the Solo 401k plan and rollover the assets into my traditional IRA because the plan sponsor (an LLC) was terminated in Dec 2022.
As suggetsed by cowdogman, I have also written a memo to myself saying that the plan is being terminated as of Jan 5, 2023.

One potential problem could be that 5500 EZ form for the year 2023 may not be available by Aug 2023. Any advice on how I would proceed in that case?

[cowdogman]

OP here. As all of you have suggested, I will file a final 5500EZ by Aug 31, 2023. I am under 59 years of age, but I requested Fidelity to terminate the Solo 401k plan and rollover the assets into my traditional IRA because the plan sponsor (an LLC) was terminated in Dec 2022.
As suggetsed by cowdogman, I have also written a memo to myself saying that the plan is being terminated as of Jan 5, 2023.

One potential problem could be that 5500 EZ form for the year 2023 may not be available by Aug 2023. Any advice on how I would proceed in that case?

Just put in the start and end dates (01/01/2023 and 01/01/2023) at the top of the form in the line starting "For the calendar plan tear...."

[MP123]

One potential problem could be that 5500 EZ form for the year 2023 may not be available by Aug 2023. Any advice on how I would proceed in that case?

As mentioned above you would use the current year's form and fill in the short plan year dates.

Also, I'd recommend using efast.dol.gov to complete the filing. That way you'll get a more or less instant confirmation that it's been received and won't have to worry about it.

[toddthebod]

The plan is terminated when the assets are distributed, not when you get a 1099.

I'm not sure this is correct. I think the plan is terminated when the plan administrator sends notice to the plan participant that th plan is terminated. That may or may not coincide with when the assets in the plan are distributed. But I agree with the sentiment that a 1099 has nothing to do with the plan termination.

Right, technically the plan is terminated on the date you specify as the plan termination date, but you have a year after that date to distribute assets, and you can't file your final 5500 until after distributing all the assets. This is from the 5500-EZ instructions, note there is no mention of the termination date of the plan, only a reference to distributing all the assets:

Final Return
All one-participant plans and all foreign plans should file a return for their final plan year indicating that all assets have been distributed.
Check box A(3) if all assets under the plan(s) (including insurance/annuity contracts) have been distributed to the participants and beneficiaries or distributed or transferred to another plan. The final plan year is the year in which distribution of all plan assets is completed.

And this is from the full Form 5500 instructions:

Short Years. For a plan year of less than 12 months (short
plan year), file the form and applicable schedules by the last
day of the 7th calendar month after the short plan year ends or
by the extended due date, if filing under an authorized
extension of time. Fill in the short plan year beginning and
ending dates in the space provided and check the appropriate
box in Part I, line B, of the Form 5500. For purposes of this
return/report, the short plan year ends on the date of the
change in accounting period or upon the complete distribution
of assets of the plan. Also see the instructions for Final Return/
Report to determine if “the final return/report” box in line B
should be checked.

[MP123]

Right ^^^

The 5500-EZ due date follows the asset distribution date, not date of plan termination, which makes the TPA's advice even more suspect.

It also brings up the question of whether there is a filing requirement if all plan assets are rolled out but the plan isn't terminated. This might happen if an over 59.5 participant rolled everything to an IRA but kept the plan open, for example. Not an issue for a larger plan with ongoing assets, but for a single participant plan I'm not really sure.

[cowdogman]

Right, technically the plan is terminated on the date you specify as the plan termination date, but you have a year after that date to distribute assets, and you can't file your final 5500 until after distributing all the assets. This is from the 5500-EZ instructions, note there is no mention of the termination date of the plan, only a reference to distributing all the assets:

But even if your statement about the one-year period is accurate (I didn't double-check), it's irrelevant for the OP's situation. He distributed all the assets on January 5, 2023.

[toddthebod]

Right, technically the plan is terminated on the date you specify as the plan termination date, but you have a year after that date to distribute assets, and you can't file your final 5500 until after distributing all the assets. This is from the 5500-EZ instructions, note there is no mention of the termination date of the plan, only a reference to distributing all the assets:

But even if your statement about the one-year period is accurate (I didn't double-check), it's irrelevant for the OP's situation. He distributed all the assets on January 5, 2023.

That makes it 100% relevant. He therefore needs to file his 5500 by August 5th and not wait for his 1099.

[cowdogman]

Right, technically the plan is terminated on the date you specify as the plan termination date, but you have a year after that date to distribute assets, and you can't file your final 5500 until after distributing all the assets. This is from the 5500-EZ instructions, note there is no mention of the termination date of the plan, only a reference to distributing all the assets:

But even if your statement about the one-year period is accurate (I didn't double-check), it's irrelevant for the OP's situation. He distributed all the assets on January 5, 2023.

That makes it 100% relevant. He therefore needs to file his 5500 by August 5th and not wait for his 1099.

Yes, filing now is what I advised the OP to do--a couple times above. What's irrelevant in your post is the one year period for distribution. I didn't want the OP to see your post and think he has more time. The filing deadline for a short plan year ending on January 5, 2023 would be August 31, 2023.

From the 5500-EZ instructions:

For a short plan year, file a return by the last day of the 7th month following the end of the short plan year.

[toddthebod]

Right, technically the plan is terminated on the date you specify as the plan termination date, but you have a year after that date to distribute assets, and you can't file your final 5500 until after distributing all the assets. This is from the 5500-EZ instructions, note there is no mention of the termination date of the plan, only a reference to distributing all the assets:

But even if your statement about the one-year period is accurate (I didn't double-check), it's irrelevant for the OP's situation. He distributed all the assets on January 5, 2023.

That makes it 100% relevant. He therefore needs to file his 5500 by August 5th and not wait for his 1099.

Yes, filing now is what I advised the OP to do--a couple times above. What's irrelevant in your post is the one year period for distribution. I didn't want the OP to see your post and think he has more time. The filing deadline for a short plan year ending on January 5, 2023 would be August 31, 2023.

From the 5500-EZ instructions:

For a short plan year, file a return by the last day of the 7th month following the end of the short plan year.

The context of my comment is that the termination date is not the deciding factor of when to file the form because you do not have to distribute all the assets at that time. It doesn't even have to be the same year as plan termination.

But this is a pedantic argument that isn't worth continuing. I think we're all in agreement that OP got bad advice, and he should file his final 5500 by this summer.

[cowdogman]

The context of my comment is that the termination date is not the deciding factor of when to file the form because you do not have to distribute all the assets at that time. It doesn't even have to be the same year as plan termination.

But this is a pedantic argument that isn't worth continuing. I think we're all in agreement that OP got bad advice, and he should file his final 5500 by this summer.

I was curious about the one-year period you mentioned and found the following at irs.gov:

Full termination
A plan termination requires more than deciding to discontinue the plan

The IRS considers a 401(k) plan terminated only if:

The date of termination is established (this can take the form of a plan amendment, board of directors’ resolution, or complete discontinuance of contributions);
The benefits and liabilities under the plan are determined as of the date of plan termination; and
All assets are distributed as soon as administratively feasible, generally within one year after the date of plan termination.
A 401(k) plan that has not distributed its assets as soon as administratively feasible is considered an ongoing plan and must continue to meet the qualification requirements, including amending the plan document for law changes. If you maintain another plan, you may have to transfer employees’ elective deferral accounts to the other plan rather than distributing them to employees.

See Terminating a Retirement Plan for the required steps.

Generally, the process of terminating a 401(k) plan includes amending the plan document, distributing all assets, notifying employees, filing a final 5500-series form and possibly filing a Form 5310, Application for Determination for Terminating PlanPDF, to ask the IRS to make a determination on the plan's qualification status at the plan termination date.

https://www.irs.gov/retirement-plans/pl ... ermination.

It seems "one year" is not the rule for distributions, and not even a hard outside date. And "as soon as administratively feasible" for a solo 401(k) would be a lot shorter period than one year.

[toddthebod]

It seems "one year" is not the rule for distributions, and not even a hard outside date. And "as soon as administratively feasible" for a solo 401(k) would be a lot shorter period than one year.

Here's what I found. I don't know how "one taxable year" works in the context of a plan that terminates mid-year.

I.R.C. § 401(k)(10) Distributions Upon Termination Of Plan

I.R.C. § 401(k)(10)(B) Distributions Must Be Lump Sum Distributions

I.R.C. § 401(k)(10)(B)(ii) Lump-Sum Distribution — For purposes of this subparagraph, the term “lump-sum distribution” has the meaning given such term by section 402(e)(4)(D)

402(e)(4)(D) Lump-sum distribution
For purposes of this paragraph—
(i)In general
The term “lump-sum distribution” means the distribution or payment within one taxable year of the recipient of the balance to the credit of an employee which becomes payable to the recipient