As summer approaches, so does a critical compliance deadline for businesses that offer retirement plans: Form 5500. If your business sponsors a 401(k) or similar plan, it’s not just about filing paperwork — it’s about ensuring your plan meets fiduciary and financial standards, especially if you’re subject to a Form 5500 audit.
Failing to file on time — or omitting required audit documentation — can lead to steep penalties and increased regulatory exposure. In this post, we’ll walk through who must file Form 5500, when an audit is required, key 2025 deadlines, and how to stay compliant.
What Is Form 5500 and Who Needs to File It?
Form 5500 is a mandatory annual report required by the IRS and Department of Labor (DOL) to ensure that employer-sponsored retirement plans comply with ERISA rules and operate transparently. This includes 401(k), profit-sharing, and defined benefit plans.
Employers with retirement plans must file one of several versions:
- Form 5500-SF for small plans,
- Form 5500 for large or complex plans,
- Form 5500-EZ for one-participant plans.
The key threshold for a Form 5500 audit is 100 or more eligible participants at the start of the plan year. If your plan meets that benchmark, an independent CPA audit is typically required, and the resulting financial statements must be submitted with your filing.
Form 5500 Audit Deadline: July 31, 2025
For calendar-year plans ending December 31, 2024, the Form 5500 filing deadline is July 31, 2025. Plans requiring an audit must submit the audited financial statements as part of the same deadline.
If you need more time, you can file Form 5558 to extend your deadline to October 15, 2025. New this year: Form 5558 can now be submitted electronically through the EFAST2 system, offering faster and more transparent processing.
Still, requesting an extension does not delay the need for your Form 5500 audit to be completed. You’ll still need to engage an independent CPA and allow time for a full review of your plan’s operations and financials.
When Is a Form 5500 Audit Required?
If your plan had 100 or more eligible participants on the first day of the plan year, you are typically required to complete a Form 5500 audit. This includes both active participants and those who are eligible but not currently contributing.
The audit must be conducted by an independent, qualified CPA and must include:
- Verification of plan assets and transactions,
- Assessment of plan contributions and distributions,
- Evaluation of internal controls related to the plan.
These audits ensure that the plan is being operated in accordance with both the plan document and ERISA guidelines. Submitting Form 5500 without a required audit is a common — and costly — compliance mistake.
Penalties for Late or Incomplete Filing
Missing your Form 5500 deadline or submitting incomplete filings can lead to significant consequences, including:
- DOL penalties up to $2,739 per day,
- IRS penalties of up to $250 per day,
- Possible investigations or disqualification of your plan’s tax-deferred status.
In some cases, late filings also increase the risk of triggering a full DOL or IRS audit. These reviews can extend beyond plan operations and impact employer liability.
How to Prepare for a Successful Form 5500 Audit
To ensure your audit and filing are both completed accurately and on time, take the following steps now:
- Engage your auditor early: A Form 5500 audit is time-intensive. Waiting until July to begin increases the risk of missing the deadline, an extension may be your best option.
- Request an extension if necessary: File Form 5558 by July 31 if you need additional time — even as a precaution.
- Update your EFAST2 credentials: Confirm that your plan administrator has active login access and signing authority.
- Reconcile participant counts early: This can affect audit requirements and filing thresholds.
- Use a compliance checklist: Work with your CPA firm to verify that all supporting schedules and disclosures are in place.
Why a Form 5500 Audit Is More Than Just a Checkbox
Your Form 5500 audit does more than meet a regulatory requirement — it demonstrates your organization’s commitment to fiduciary responsibility and financial transparency. It also gives plan sponsors the opportunity to identify potential process gaps and correct them before they become costly.
At Scharf Pera & Co., we’ve helped businesses across the region manage their retirement plan filings with confidence. Our experienced audit team works closely with administrators and plan sponsors to ensure every aspect of the audit is handled efficiently and accurately.
Need Help Navigating the Form 5500 Audit Process?
Whether you’re unsure if your plan requires an audit, need help coordinating with your third-party administrator, or want a second opinion before you file — we’re here to help.
Contact Scharf Pera & Co. today to ensure your Form 5500 audit is handled properly, professionally, and on time.
