Solo 401k Plan Administration: Deadlines and Form 5500-EZ

Each row is sourced in the sections below.

A business can set up a Solo 401k for a Tax Year as late as its tax filing deadline, including extensions, and still make Employer Contributions for that year. A sole proprietor with no employees can also make Elective Deferrals for that first year if the plan is adopted by the filing deadline without extensions.^[1]

Form 5500-EZ has a box for a plan “retroactively adopted” this way under section 201 of the SECURE Act^[2], and the first-year deferral rule for sole proprietors applies for 2023 and later years^[1].

The plan needs an Employer Identification Number: Form 5500-EZ asks for the employer's EIN and says not to enter a Social Security number^[2]. EINs are free from the IRS^[5]. Who can set up a plan at all is covered on the eligibility page.

• Elective Deferrals: An owner must elect Elective Deferrals by the end of the Tax Year, and can then deposit them by the tax return filing deadline, including extensions.^[1]
• Employer Contributions: Employer Contributions for a Tax Year can be deposited as late as the business’s tax return due date, including extensions.^[1]

How much you can contribute each year is on the contribution limits page.

Form 5500-EZ is the annual return for one-participant plans^[2].

When you have to file

A Solo 401k must file Form 5500-EZ for any plan year in which the combined assets of all the business’s one-participant plans exceed $250,000 at the end of the year, and for the plan’s final year whatever its assets.^[2][3]Note: The IRS’s one-participant 401(k) page says a plan files if it has “$250,000 or more” in assets, while the Form 5500-EZ instructions excuse a plan whose assets do “not exceed $250,000”. The instructions govern the form, so a plan at exactly $250,000 should confirm with its provider or a tax professional.

The threshold counts every one-participant plan the employer maintains, so two plans with $150,000 each must both file^[2]. Your final-year return should show that all assets have been distributed^[2].

When it's due

Form 5500-EZ is due by the last day of the 7th month after the plan year ends, which is July 31 for a calendar-year plan. Filing Form 5558 extends the deadline by up to 2½ months, and an extension of the employer’s income tax return extends it automatically when the plan year and the tax year are the same.^[2] If the due date falls on a weekend or legal holiday, you can file on the next business day^[2].

How to file

File on paper with the IRS or electronically through the Department of Labor's EFAST2 system^[2]. A one-participant plan can't file Form 5500 or Form 5500-SF instead^[2]. For plan years beginning on or after January 1, 2025, a filer who must file at least 10 returns of any type with the IRS in the year (W-2s and 1099s count) has to file electronically^[2]. Many full-service Providers prepare the form for you; see which do in our Provider comparison.

The penalty for filing Form 5500-EZ late is $250 a day, up to $150,000 per plan year. Before the IRS sends a penalty notice, a plan can instead file its late returns on paper under the late filer penalty relief program (Rev. Proc. 2015-32) for $500 per return, capped at $1,500 per submission for the same plan.^[2][4]

Under the relief program, each plan is submitted separately, every late return goes on paper (not EFAST2), and you attach Form 14704^[4][2]. If you have already received penalty notice CP 283 for a year, the program can't be used for that year's return^[4].

• Check the plan's total assets at the end of each plan year against the Form 5500-EZ threshold.
• If you hire, check each employee against the plan's entry rules on the eligibility page. A business with eligible employees no longer has a one-participant plan^[3].
• Keep a copy of any Form 5558 or tax-return extension with the plan's records; the instructions require it for both^[2].