IRS Releases Instructions for 2020 Form 5330

January 5, 2021

On December 23, 2020, the IRS released the 2020 Instructions for Form 5330, Return of Excise Taxes Related to Employee Benefit Plans. The IRS updates the form instructions annually for clarification purposes and to incorporate any regulatory or reporting changes.

As background, the Form 5330 is used to report and pay a wide range of excise taxes related to employee benefit plan failures. These errors include, but are not limited to, prohibited transactions (e.g., the late deposit of employee contributions), excess contributions to 401(k) plans and pension plan minimum funding deficiencies.

The instructions outline the filing due dates and provide specific directions for completing the form and applicable schedules, as well as calculating the excise tax for the various types of failures. The 2020 updates include guidance on reporting the tax on multiemployer plans in endangered or critical status.

Additionally, the instructions for Schedule C clarify that a section 403(b) tax sheltered annuity plan is not subject to the prohibited transactions excise tax.

Employers should be aware of the availability of the updated publication.

2020 Form 5330 Instructions »