Plans Retroactively Adopted Under SECURE Act Do Not Have to File 2020 Form 5500

The IRS stated in its August 6, 2021 edition of the Employee Plans newsletter that employers that adopt retirement plans during the 2021 tax year, but before their 2020 tax filing deadline (including extensions) and elect to treat the plan as effective as of the last day of the 2020 tax year, as permitted by the SECURE Act, are not required to file a Form 5500 series for the 2020 tax year.

While a 2020 Form 5500 is not required, the IRS explained that the 2021 Form 5500 will include a check box that the employer will mark indicating that it elects to treat the plan as retroactively adopted as of the last day of its 2020 tax year. Employers with defined benefit plans will also be required to attach a 2020 Schedule SB to their 2021 Form 5500, along with the 2021 Schedule SB.

The IRS notes that it anticipates applying similar rules to retroactively adopted plans after the employer’s 2021 tax year.