PDF document

- 1 -

                      Userid: CPM                Schema:           Leadpct: 100% Pt. size: 9.5  Draft              Ok to Print
                                                 instrx
AH XSL/XML            Fileid: … ns/i5330/202312/a/xml/cycle03/source                           (Init. & Date) _______

Page 1 of 15                                                                                   17:32 - 19-Jan-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

                                                                                               Department of the Treasury
                                                                                               Internal Revenue Service
Instructions for Form 5330

(Rev. December 2023)
Return of Excise Taxes Related to Employee Benefit Plans

Section references are to the Internal Revenue Code unless         • A failure of an applicable plan reducing future benefit 
otherwise noted.                                                   accruals to satisfy notice requirements (section 4980F).

                                                                   Who Must File
Future Developments
                                                                   A Form 5330 must be filed by any of the following.
For the latest information about developments related to             1. A plan entity manager of a tax-exempt entity who 
Form 5330 and its instructions, such as legislation enacted        approves, or otherwise causes the entity to be party to, a 
after they were published, go to IRS.gov/Form5330.                 prohibited tax shelter transaction during the tax year and 
                                                                   knows or has reason to know the transaction is a prohibited 
What’s New                                                         tax shelter transaction under section 4965(a)(2).
Mandatory electronic filing.  Under final regulations (T.D.          2. An employer liable for the tax under section 4971 for 
9972) issued in February 2023, any employer or individual          failure to meet the minimum funding standards under
required to file an excise tax return on Form 5330 must file       section 412.
the excise tax return electronically for tax years ending on or      3. An employer liable for the tax under section 4971(f) for 
after December 31, 2023, if the filer is required to file at least a failure to meet the liquidity requirement of section 430(j) (or 
10 returns of any type during the calendar year that the Form      section 412(m)(5) as it existed prior to amendment by the 
5330 is due. See Regulations section 54.6011-3 for more            Pension Protection Act of 2006 (PPA '06)), for plans with 
information.                                                       delayed effective dates under PPA '06.
Extension.   Effective in 2024, Form 8868, Application for           4. An employer with respect to a multiemployer plan 
Extension of Time To File an Exempt Organization Return or         liable for the tax under section 4971(g)(2) for failure to comply 
Excise Taxes Related to Employee Benefit Plans, is used to         with a funding improvement or rehabilitation plan under 
request an extension of time to file Form 5330. If approved,       section 432.
you may be granted an extension of up to 6 months after the          5. An employer with respect to a multiemployer plan 
normal due date of Form 5330. Form 5558, Application for           liable for the tax under section 4971(g)(3) for failure to meet 
Extension of Time To File Certain Employee Plan Returns, is        the requirements for plans in endangered or critical status 
no longer used for an extension of time to file Form 5330.         under section 432.
                                                                     6. A multiemployer plan sponsor liable for the tax under 
                                                                   section 4971(g)(4) for failure to adopt a rehabilitation plan 
General Instructions
                                                                   within the time required under section 432.
Purpose of Form                                                      7. A cooperative and small employer charity (CSEC) plan 
File Form 5330 to report the tax on:                               sponsor liable for the tax under section 4971(h) for failure to 
• A prohibited tax shelter transaction (section 4965(a)(2));       adopt a funding restoration plan within the time required 
• A minimum funding deficiency (section 4971(a) and (b));          under section 433(j)(3).
• A failure to pay liquidity shortfall (section 4971(f));            8. An employer liable for the tax under section 4972 for 
• A failure to comply with a funding improvement or                nondeductible contributions to qualified plans.
rehabilitation plan (section 4971(g)(2));                            9. An individual liable for the tax under section 4973(a)(3) 
• A failure to meet requirements for plans in endangered or        because an excess contribution to a section 403(b)(7)(A) 
critical status (section 4971(g)(3));                              custodial account was made for them and that excess has 
• A failure to adopt rehabilitation plan (section 4971(g)(4));     not been eliminated, as specified in sections 4973(c)(2)(A) 
• A failure to adopt funding restoration plan                      and (B).
(section 4971(h));
• Nondeductible contributions to qualified plans                     10. A disqualified person liable for the tax under
(section 4972);                                                    section 4975 for participating in a prohibited transaction 
• Excess contributions to a section 403(b)(7)(A) custodial         (other than a fiduciary acting only as such), or an individual or 
account (section 4973(a)(3));                                      the individual’s beneficiary who engages in a prohibited 
• A prohibited transaction (section 4975);                         transaction with respect to the individual’s retirement 
• A disqualified benefit provided by funded welfare plans          account, unless section 408(e)(2)(A) or section 408(e)(4) 
(section 4976);                                                    applies, for each tax year or part of a tax year in the taxable 
• Excess fringe benefits (section 4977);                           period applicable to such prohibited transaction.
• Certain employee stock ownership plan (ESOP)                       11. An employer liable for the tax under section 4976 for 
dispositions (section 4978);                                       maintaining a funded welfare benefit plan that provides a 
• Excess contributions to plans with cash or deferred              disqualified benefit during any tax year.
arrangements (section 4979);                                         12. An employer who pays excess fringe benefits and has 
• Certain prohibited allocations of qualified securities by an     elected to be taxed under section 4977 on such payments.
ESOP (section 4979A);                                                13. An employer or worker-owned cooperative, as defined 
• Reversions of qualified plan assets to employers                 in section 1042(c)(2), that maintains an employee stock 
(section 4980); and

Jan 19, 2024                                              Cat. No. 11871X

- 2 -

Page 2 of 15          Fileid: … ns/i5330/202312/a/xml/cycle03/source                                      17:32 - 19-Jan-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

ownership plan (ESOP) that disposes of the qualified                              Form 8868 does not extend the time to pay your 
securities, as defined in section 1042(c)(1), within the                     !    taxes. Any tax due must be paid with this application 
specified 3-year period (see section 4978).                               CAUTION for an extension of time to file Form 5330. 
  14. An employer liable for the tax under section 4979 on                Additionally, interest is charged on taxes not paid by the due 
excess contributions to plans with a cash or deferred                     date even if an extension of time to file is granted. See the 
arrangement, etc.                                                         instructions for Form 8868.
  15. An employer or worker-owned cooperative that made 
the written statement described in section 664(g)(1)(E) or                How To File
1042(b)(3)(B) and made an allocation prohibited under                     Electronic filing. An employer or an individual required to 
section 409(n) of qualified securities of an ESOP taxable                 file an excise tax return related to employee benefit plans can 
under section 4979A; or, an employer or worker-owned                      file Form 5330 electronically using the IRS Modernized e-file 
cooperative who made an allocation of S corporation stock of              (MeF) System through an IRS Authorized e-filing Provider. All 
an ESOP prohibited under section 409(p) taxable under                     filers are encouraged to file Form 5330 electronically 
section 4979A.                                                            because it is safe, easy to complete, and you have an 
  16. An employer who receives an employer reversion from                 immediate record that the return was filed.
a deferred compensation plan taxable under section 4980.
                                                                          Mandatory electronic filing. Under Regulations section 
  17. An employer or multiemployer plan liable for the tax                54.6011-3, any employer or individual required to file an 
under section 4980F for failure to give notice of a significant           excise tax return on Form 5330 must file the excise tax return 
reduction in the rate of future benefit accrual.                          electronically for tax years ending on or after December 31, 
  A Form 5330 and tax payment is required for any of the                  2023, if the filer is required to file at least 10 returns of any 
following.                                                                type during the calendar year that the Form 5330 is due. See 
• Each year any of the following under Who Must File,                     T.D. 9972 for more information. The failure to file a return 
earlier, apply: (1), (2), (3), (5), (6), (7), (8), (9), (10), (11), (12), electronically when required is deemed a failure to file the 
(13), (14), or (16).                                                      return even if the filer submits a paper return.
• Each failure of an employer to make the required                           “Returns” for purposes of these instructions include 
contribution to a multiemployer plan, as required by a funding            information returns (for example, Forms W-2 and Forms 
improvement or rehabilitation plan under section 432.                     1099), income tax returns, employment tax returns (including 
• A reversion of plan assets from a qualified plan taxable                quarterly Forms 941, Employer's Quarterly Federal Tax 
under section 4980.                                                       Return), and excise tax returns.
• Each year or part of a year in the taxable period in which a               On a year-by-year and form-by-form basis, the IRS may 
prohibited transaction occurs under section 4975. See the                 waive the requirement to file Form 5330 electronically in 
instructions for Schedule C, line 2, columns (d) and (e), for a           cases of undue hardship. In certain circumstances, a filer 
definition of “taxable period.”                                           may be administratively exempt from the requirement to file 
                                                                          electronically. If the IRS's systems do not support electronic 
When To File                                                              filing, the filer will not be required to file electronically. The 
File one Form 5330 to report all excise taxes with the same               filer should maintain documentation supporting their undue 
filing due date. However, if the taxes are from separate plans,           hardship or other applicable reason for not filing electronically 
file separate forms for each plan.                                        in the filer's records. For more information about mandatory 
                                                                          electronic filing based on the 10-return threshold, waivers, 
  Generally, filing Form 5330 starts the statute of limitations 
                                                                          and exemptions, see Regulations section 54.6011-3.
running only with respect to the particular excise tax(es) 
reported on that Form 5330. However, statutes of limitations              Paper forms for filing. Form 5330 can be filed on paper if a 
with respect to the prohibited transaction excise tax(es) are             filer is not subject to the electronic filing requirement under 
based on the filing of the applicable Form 5500, Annual                   Regulations section 54.6011-3. The official IRS printed Form 
Return/Report of Employee Benefit Plan.                                   5330 can be found on the IRS website and downloaded to 
                                                                          your computer to print and sign before mailing to the address 
  Use Table 1 to determine the due date of Form 5330.                     specified in these instructions. See Where To File below. You 
Extension. Effective in 2024, a filer must use Form 8868,                 can complete paper Form 5330 by hand with pen or 
Application for Extension of Time To File an Exempt                       typewriter using only blue or black ink. Entries should not 
Organization Return or Excise Taxes Related to Employee                   exceed the lines provided on the form. You can find Form 
Benefit Plans, to request for an extension of time to file Form           5330 and its instructions by visiting the IRS Internet website 
5330. You may be granted an extension of up to 6 months                   at IRS.gov/FormsPubs.
after the normal due date of Form 5330 if Form 8868 is filed 
on or before the normal due date (not including any                       Where To File
extensions) of the return. Form 5558, Application for                     File the paper Form 5330 at the following address:
Extension of Time To File Certain Employee Plan Returns, is 
no longer used for an extension of time to file Form 5330.                        Department of the Treasury
                                                                                  Internal Revenue Service Center
  You must file a separate Form 8868 for each excise tax                          Ogden, UT 84201
that has a different filing due date for the Form 5330. 
However, you can file one Form 8868 if each excise tax on 
the Form 5330 has the same filing due date.                               Note. If an employer or individual required to file the Form 
                                                                          5330 fails to file the return electronically when required to do 
                                                                          so, the filer is considered not to have filed the return even if 
                                                                          the filer submits a paper return. See Regulations section 

2                                                                                                         Instructions for Form 5330

- 3 -

Page 3 of 15   Fileid: … ns/i5330/202312/a/xml/cycle03/source                                                          17:32 - 19-Jan-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Table 1. Excise Tax Due Dates

IF the taxes are due under 
section . . .               THEN file Form 5330 by the . . .
                            15th day of the 5th month following the close of the entity manager's tax year during which the 
4965                        tax-exempt entity becomes a party to the transaction.
4971                        15th day of the 10th month after the last day of the plan year.
4971(f)                     15th day of the 10th month after the last day of the plan year.
4971(g)(2)                  15th day of the 10th month after the last day of the plan year.
4971(g)(3)                  15th day of the 10th month after the last day of the plan year.
4971(g)(4)                  15th day of the 10th month after the last day of the plan year.
4971(h)                     15th day of the 10th month after the last day of the plan year.
4972                        last day of the 7th month after the end of the tax year of the employer or other person who must file this 
                            return.
4973(a)(3)                  last day of the 7th month after the end of the tax year of the individual who must file this return.
4975                        last day of the 7th month after the end of the tax year of the employer or other person who must file this 
                            return.
4976                        last day of the 7th month after the end of the tax year of the employer or other person who must file this 
                            return.
4977                        last day of the 7th month after the end of the calendar year in which the excess fringe benefits were 
                            paid to your employees.
4978                        last day of the 7th month after the end of the tax year of the employer or other person who must file this 
                            return.
4979                        last day of the 15th month after the close of the plan year to which the excess contributions or excess 
                            aggregate contributions relate.
4979A                       last day of the 7th month after the end of the tax year of the employer or other person who must file this 
                            return.
4980                        last day of the month following the month in which the reversion occurred.
4980F                       last day of the month following the month in which the failure occurred.
If the filing due date falls on a Saturday, Sunday, or legal holiday, the return may be filed on the next business day.

301.6651-1 for more information relating to the failure to file a failure to file a tax return, starts from the due date or 
tax return.                                                       extended due date of the return. Interest rates are variable 
                                                                  and may change quarterly. (See section 6601.)
Private delivery services (PDSs). You can use certain 
private delivery services (PDSs) designated by the IRS to         Penalty for late filing of return.                   If you do not file a return by 
meet the “timely mailing as timely filing/paying” rule for tax    the due date, including extensions, you may have to pay a 
returns and payments. Go to IRS.gov/PDS for the current list      penalty of 5% of the unpaid tax for each month or part of a 
of designated services.                                           month the return is late, up to a maximum of 25% of the 
The PDS can tell you how to get written proof of the              unpaid tax. The penalty will not be imposed if you can show 
mailing date.                                                     that the failure to file on time was due to reasonable cause. If 
                                                                  you file late, you may attach a statement to Form 5330 
For the IRS mailing address to use if you're using a PDS,         explaining the reasonable cause.
go to IRS.gov/PDSstreetAddresses.
                                                                  Penalty for late payment of tax.                     If you do not pay the tax 
        Private delivery services cannot deliver items to P.O.    when due, you may have to pay a penalty of  /  of 1% of the 1 2
!       boxes. You must use the U.S. Postal Service to mail       unpaid tax for each month or part of a month the tax is not 
CAUTION any item to an IRS P.O. box address.
                                                                  paid, up to a maximum of 25% of the unpaid tax. The penalty 
                                                                  will not be imposed if you can show that the failure to pay on 
Interest and Penalties                                            time was due to reasonable cause.
Interest. We are required by law to charge interest when you        Interest and penalties for late filing and late payment will 
do not pay your liability on time. Generally, we calculate        be billed separately after the return is filed.
interest on any unpaid balance from the due date of your 
return (regardless of extensions of time to file) until you pay   Claim for Refund or Credit/Amended Return
the amount you owe in full, including accrued interest and        File an amended Form 5330 for any of the following.
any penalty charges. Interest on some penalties accrues on        • To claim a refund of overpaid taxes reportable on Form 
any unpaid balance from the date we notify you of the penalty     5330.
until it is paid in full. Interest on other penalties, such as    • To receive a credit for overpaid taxes.

Instructions for Form 5330                                                                                                                       3

- 4 -

Page 4 of 15 Fileid: … ns/i5330/202312/a/xml/cycle03/source 17:32 - 19-Jan-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

• To report additional taxes due within the same tax year of If the plan has a foreign address, enter the information in
the filer if those taxes have the same due date as those the following order: city or town, state or province, and
previously reported. Check the box in item H of the Entity country. Follow the country's practice for entering the postal
Section and report the correct amount of taxes on code. Do not abbreviate the country name.
Schedule A through L, as appropriate, and on Part I, lines 1
Item E. Plan sponsor's EIN. Enter the nine-digit EIN
through 16. See the instructions for Part II, lines 17 through
assigned to the plan sponsor. This should be the same
19.
number used to file the Form 5500 series return/report.
If you file an amended return to claim a refund or credit, Item F. Plan year ending. “Plan year” means the calendar
the claim must state in detail the reasons for claiming the or fiscal year on which the records of the plan are kept. Enter
refund. In order for the IRS to promptly consider your claim, eight digits in month/date/year order. This number assists the
you must provide the appropriate supporting evidence. See IRS in properly identifying the plan and time period for which
Regulations section 301.6402-2 for more details. Form 5330 is being filed. For example, a plan year ending
March 31, 2022, should be shown as 03/31/2022.
Specific Instructions Item G. Plan number. Enter the three-digit number that the
employer or plan administrator assigned to the plan. This
Filer tax year. Enter the tax year of the employer, entity, or
three-digit number is used with the EIN entered on item B
individual on whom the tax is imposed by using the plan year
and is used by the IRS, the Department of Labor, and the
beginning and ending dates entered in Part I of Form 5500 or
Pension Benefit Guaranty Corporation as a unique 12-digit
by using the tax year of the business return filed.
number to identify the plan.
Item A. Name and address of filer. Enter the name and
If the plan number is not provided, this will cause a
address of the employer, individual, or other entity who is
delay in processing your return.
liable for the tax. CAUTION!
Include the suite, room, or other unit number after the
street number. If the post office does not deliver mail to the Item H. Amended return. If you are filing an amended Form
street address and you have a P.O. box, show the box 5330, check the box on this line, and see the instructions for
number instead of the street address. Part II, lines 17 through 19. Also, see Claim for Refund or
Credit/Amended Return, earlier.
If the plan has a foreign address, enter the information in
the following order: city or town, state or province, country, Filer's signature. To reduce the possibility of
and ZIP or foreign postal code. Follow the country's practice correspondence and penalties, please sign and date the
for entering the postal code. Do not abbreviate the country form. Also, enter a daytime phone number where you can be
name. reached.
Item B. Filer's identifying number. Enter the filer's Preparer's signature. Anyone who prepares your return
identifying number in the appropriate section. The filer's and does not charge you should not sign your return. For
identifying number is either the filer's employer identification example, a regular full-time employee or your business
number (EIN) or the filer's social security number (SSN), but partner who prepares the return should not sign.
not both. The identifying number of an individual, other than a Generally, anyone who is paid to prepare the return must
sole proprietor with an EIN, is the individual’s SSN. The sign the return in the space provided and fill in the Paid
identifying number for all other filers is their EIN. The EIN is Preparer's Use Only area. See section 7701(a)(36)(B) for
the nine-digit number assigned to the plan sponsor/employer, exceptions.
entity, or individual on whom the tax is imposed.
In addition to signing and completing the required
Item C. Name of plan. Enter the formal name of the plan or information, the paid preparer must give a copy of the
enough information to identify the plan. completed return to the taxpayer.
This should be the same name indicated on the Form
5500 series return/report if that form is required to be filed for Note. If Form 5330 is filed on paper, a paid preparer may
the plan. sign original or amended returns by rubber stamp,
mechanical device, or computer software program.
Item D. Name and address of plan sponsor. The term
“plan sponsor” means: Part I. Taxes
1. The employer, for an employee benefit plan Line 4. Enter the total amount of the disqualified benefit
established or maintained by a single employer. under section 4976. Section 4976 imposes an excise tax on
2. The employee organization, in the case of a plan of an employers who maintain a funded welfare benefit plan that
employee organization. provides a disqualified benefit during any tax year. The tax is
3. The association, committee, joint board of trustees, or 100% of the disqualified benefit.
other similar group of representatives of the parties who Generally, a disqualified benefit is any of the following.
establish or maintain the plan, if the plan is established or • Any post-retirement medical benefit or life insurance
maintained jointly by one or more employers and one or more benefit provided for a key employee unless the benefit is
employee organizations, or by two or more employers. provided from a separate account established for the key
employee under section 419A(d).
Include the suite, room, or other unit number after the Any post-retirement medical benefit or life insurance
•
street number. If the post office does not deliver mail to the benefit unless the plan meets the nondiscrimination
street address and you have a P.O. box, show the box requirements of section 505(b) for those benefits.
number instead of the street address. Any portion of the fund that reverts to the benefit of the
•
employer.

4 Instructions for Form 5330

- 5 -

Page 5 of 15 Fileid: … ns/i5330/202312/a/xml/cycle03/source 17:32 - 19-Jan-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Lines 5a and 5b. Section 4978 imposes an excise tax on 3. The accrual or allocation of S corporation shares in an
the sale or transfer of securities acquired in a sale or qualified ESOP during a nonallocation year constituting a prohibited
gratuitous transfer to which section 1042 or section 664(g) allocation under section 409(p).
applied, respectively, if the sale or transfer takes place within 4. A synthetic equity owned by a disqualified person in
3 years after the date of the acquisition of qualified securities, any nonallocation year.
as defined in section 1042(c)(1) or a section 664(g) transfer.
Prohibited allocations for ESOP or worker-owned
The tax is 10% of the amount realized on the disposition of cooperative. For purposes of items 1 and 2 above, a
the qualified securities if an ESOP or eligible worker-owned “prohibited allocation of qualified securities by any ESOP or
cooperative, as defined in section 1042(c)(2), disposes of the eligible worker-owned cooperative” is any allocation of
qualified securities within the 3-year period described above, qualified securities acquired in a nonrecognition-of-gain sale
and either of the following applies. under section 1042, which violates section 409(n), and any
• The total number of shares held by that plan or cooperative benefit that accrues to any person in violation of
after the disposition is less than the total number of employer section 409(n).
securities held immediately after the sale; or
• Except to the extent provided in regulations, the value of Under section 409(n), an ESOP or worker-owned
qualified securities held by the plan or cooperative after the cooperative cannot allow any portion of assets attributable to
disposition is less than 30% of the total value of all employer employer securities acquired in a section 1042 sale to accrue
securities as of the disposition (60% of the total value of all or be allocated, directly or indirectly, to the taxpayer, or any
employer securities in the case of any qualified employer person related to the taxpayer, involved in the transaction
securities acquired in a qualified gratuitous transfer to which during the nonallocation period. For purposes of
section 664(g) applied). section 409(n), “relationship to the taxpayer” is defined under
section 267(b).
See section 4978(b)(2) for the limitation on the amount of
tax. The nonallocation period is the period beginning on the
date the qualified securities are sold and ending on the later
The section 4978 tax must be paid by the employer or the of:
eligible worker-owned cooperative that made the written • 10 years after the date of sale, or
statement described in section 1042(b)(3)(B) on dispositions • The date on which the final payment is made if acquisition
that occurred during their tax year. indebtedness was incurred at the time of sale.
The section 4978 tax does not apply to a distribution of The employer sponsoring the plan or the eligible
qualified securities or sale of such securities if any of the worker-owned cooperative is responsible for paying the tax.
following occurs.
• The death of the employee. For purposes of items 3 and 4, under Line 6, earlier, the
• The retirement of the employee after the employee has excise tax on these transactions under section 4979A is 50%
reached age 59 / .1 2 of the amount involved. The amount involved includes the
• The disability of the employee (within the meaning of following.
section 72(m)(7)). 1. The value of any synthetic equity owned by a
• The separation of the employee from service for any disqualified person in any nonallocation year. “Synthetic
period that results in a 1-year break in service, as defined in equity” means any stock option, warrant, restricted stock,
section 411(a)(6)(A). deferred issuance stock right, or similar interest or right that
For purposes of section 4978, an exchange of qualified gives the holder the right to acquire or receive stock of the S
securities in a reorganization described in section 368(a)(1) corporation in the future. Synthetic equity may also include a
for stock of another corporation will not be treated as a stock appreciation right, phantom stock unit, or similar right to
disposition. a future cash payment based on the value of the stock or
appreciation; and nonqualified deferred compensation as
For section 4978 excise taxes, the amount entered described in Regulations section 1.409(p)-1(f)(2)(iv). The
on Part I, line 5a, is the amount realized on the value of a synthetic equity is the value of the shares on which
disposition of qualified securities, multiplied by 10%. the synthetic equity is based or the present value of the
Also, check the appropriate box on line 5b. nonqualified deferred compensation.
2. The value of any S corporation shares in an ESOP
Line 6. Section 4979A imposes a 50% excise tax on accruing during a nonallocation year or allocated directly or
allocated amounts involved in any of the following. indirectly under the ESOP or any other plan of the employer
1. A prohibited allocation of qualified securities by any qualified under section 401(a) for the benefit of a disqualified
ESOP or eligible worker-owned cooperative. person. For additional information, see Regulations
2. A prohibited allocation described in section 1.409(p)-1(b)(2).
section 664(g)(5)(A). Section 664(g)(5)(A) prohibits any 3. The total value of all deemed-owned shares of all
portion of the assets of the ESOP attributable to securities disqualified persons.
acquired by the plan in a qualified gratuitous transfer to be
allocated to the account of: For purposes of determining a nonallocation year, the
attribution rules of section 318(a) will apply; however, the
a. Any person related to the decedent within the meaning option rule of section 318(a)(4) will not apply. Additionally, the
of section 267(b) or a member of the decedent's family within attribution rules defining family member are modified to
the meaning of section 2032A(e)(2); or include the individual's:
b. Any person who, at the time of the allocation or at any • Spouse,
time during the 1-year period ending on the date of the • Ancestor or lineal descendant of the individual or the
acquisition of qualified employer securities by the plan, is a individual's spouse, and
5% shareholder of the employer maintaining the plan.

Instructions for Form 5330 5

- 6 -

Page 6 of 15 Fileid: … ns/i5330/202312/a/xml/cycle03/source 17:32 - 19-Jan-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

• A brother or sister of the individual or of the individual's to know that the transaction is a prohibited tax shelter
spouse and any lineal descendant of the brother or sister. transaction, the entity manager must pay an excise tax under
A spouse of an individual legally separated from an section 4965(b)(2).
individual under a decree of divorce or separate maintenance For purposes of section 4965, plan entities are:
is not treated as the individual's spouse. • Qualified pension, profit-sharing, and stock bonus plans
An individual is a disqualified person if: described in section 401(a);
• The total number of shares owned by the person and the • Annuity plans described in section 403(a);
members of the person's family, as defined in • Annuity contracts described in section 403(b);
section 409(p)(4)(D), is at least 20% of the deemed-owned • Qualified tuition programs described in section 529;
shares, as defined in section 409(p)(4)(C), in the S • Retirement plans maintained by a governmental employer
corporation; or described in section 457(b);
• The person owns at least 10% of the deemed-owned • Individual retirement accounts within the meaning of
shares, as defined in section 409(p)(4)(C), in the S section 408(a);
corporation. • Individual retirement annuities within the meaning of
section 408(b);
Under section 409(p)(7), the Secretary of the • Archer medical savings accounts (MSAs) within the
! Treasury may, through regulations or other guidance meaning of section 220(d);
CAUTION of general applicability, provide that a nonallocation
• Coverdell education savings accounts described in
year occurs in any case in which the principal purpose of the section 530; and
ownership structure of an S corporation constitutes an • Health savings accounts (HSAs) within the meaning of
avoidance or evasion of section 409(p). See Regulations section 223(d).
section 1.408(p)-1.
An entity manager is the person who approves or
For section 4979A excise taxes, the amount entered on otherwise causes the entity to be a party to a prohibited tax
Part I, line 6, is 50% of the amount involved in the prohibited shelter transaction.
allocations described in items 1 through 4, earlier, under The excise tax under section 4965(a)(2) is $20,000 for
Line 6. each approval or other act causing the organization to be a
Line 10a. Under section 4971(g)(2), each employer who party to a prohibited tax shelter transaction.
contributes to a multiemployer plan and fails to comply with a A “prohibited tax shelter transaction” is any listed
funding improvement or rehabilitation plan will be liable for an transaction and any prohibited reportable transaction, as
excise tax for each failure to make a required contribution defined later.
within the time frame under such plan. Enter the amount of 1. A “listed transaction” is a reportable transaction that is
each contribution the employer failed to make in a timely the same as, or substantially similar to, a transaction
manner. specifically identified by the Secretary of the Treasury as a
A “funding improvement plan” is a plan which consists of tax avoidance transaction for purposes of section 6011.
the actions, including options or a range of options to be 2. A “prohibited reportable transaction” is:
proposed to the bargaining parties, formulated to provide, a. Any confidential transaction within the meaning of
based on reasonably anticipated experience and reasonable Regulations section 1.6011-4(b)(3), or
actuarial assumptions, for the attainment of the following
requirements by the plan during the funding improvement b. Any transaction with contractual protection within the
period. meaning of Regulations section 1.6011-4(b)(4).
1. The plan's funded percentage as of the close of the
Part II. Tax Due
funding improvement period equals or exceeds a percentage
equal to the sum of: If you are filing an amended Form 5330 and you paid
a. The percentage as of the beginning of the funding taxes with your original return and those taxes have
improvement period, plus the same due date as those previously reported,
check the box in item H and enter the tax reported on your
b. 33% of the difference between 100% and the
original return in the entry space for line 18. If you file Form
percentage as of the beginning of the funding improvement
5330 for a claim for refund or credit, show the amount of
period (or 20% of the difference if the plan is in seriously
overreported tax in parentheses on line 19. Otherwise, show
endangered status).
the amount of additional tax due on line 19 and include the
2. No accumulated funding deficiency for any plan year payment with the amended Form 5330.
during the funding improvement period, taking into account
any extension of the amortization period under Lines 17 through 19. If you file Form 5330 on paper, make
section 431(d). your check or money order payable to the “United States
A “rehabilitation plan” is a plan which consists of actions, Treasury” for the full amount due. Attach the payment to your
including options or a range of options to be proposed to the return. Write your name, identifying number, plan number,
bargaining parties, formulated to enable the plan to cease to and “Form 5330, Section ____” on your payment.
be in critical status by the end of the rehabilitation period. File at the address shown under Where To File, earlier.
All or part of this excise tax may be waived under
section 4971(g)(5).
Line 16. If a tax-exempt entity manager approves or
otherwise causes the entity to be a party to a prohibited tax
shelter transaction during the year and knows or has reason

6 Instructions for Form 5330

- 7 -

Page 7 of 15 Fileid: … ns/i5330/202312/a/xml/cycle03/source 17:32 - 19-Jan-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

contributions made on behalf of the employer or the
Schedule A. Tax on Nondeductible
employer's family.
Employer Contributions to Qualified For purposes of this exception, the combined plan
Employer Plans (Section 4972) deduction limits are first applied to contributions to the
defined benefit plan and then to the defined contribution plan.
Section 4972. Section 4972 imposes an excise tax on Restorative payments to a defined contribution plan are
employers who make nondeductible contributions to their not considered nondeductible contributions if the payments
qualified plans. The excise tax is equal to 10% of the are made to restore some or all of the plan's losses due to an
nondeductible contributions in the plan as of the end of the action (or a failure to act) that creates a reasonable risk of
employer's tax year. liability for breach of fiduciary duty. Amounts paid in excess of
A “qualified employer plan” for purposes of this section the loss are not considered restorative payments.
means any plan qualified under section 401(a), any annuity For these purposes, multiemployer plans are not taken
plan qualified under section 403(a), and any simplified into consideration in applying the overall limit on deductions
employee pension plan qualified under section 408(k) or any where there is a combination of defined benefit and defined
simple retirement account under section 408(p). The term contribution plans.
qualified plan does not include certain governmental plans
and certain plans maintained by tax-exempt organizations. Schedule B. Tax on Excess
For purposes of section 4972, “nondeductible
Contributions to Section 403(b)(7)(A)
contributions” for the employer's current tax year are the sum
of: Custodial Accounts
1. The excess (if any) of the employer's contribution for (Section 4973(a)(3))
the tax year less the amount allowable as a deduction under
section 404 for that year; and Section 4973(a) imposes a 6% excise tax on excess
contributions to section 403(b)(7)(A) custodial accounts at
2. The total amount of the employer's contributions for the close of the tax year. The tax is paid by the individual
each preceding tax year that was not allowable as a account holder.
deduction under section 404 for such preceding year,
reduced by the sum of: Line 1. Enter total current year contributions, less any
rollover contributions described in section 403(b)(8) or 408(d)
a. The portion of that amount available for return under
(3)(A).
the applicable qualification rules and actually returned to the
employer prior to the close of the current tax year; and Line 2. Enter the amount excludable under section 415(c)
b. The portion of such amount that became deductible for (limit on annual additions).
a preceding tax year or for the current tax year. To determine the amount excludable for a specific
Although pre-1987 nondeductible contributions are not TIP year, see Pub. 571, Tax-Sheltered Annuity Plans
subject to this excise tax, they are taken into account to (403(b) Plans), for that year.
determine the extent to which post-1986 contributions are
deductible. See section 4972 and Pub. 560, Retirement The limit on annual additions under section 415(c)(1)(A) is
Plans for Small Business, for details. subject to cost-of-living adjustments as described in
section 415(d). The dollar limit for a calendar year, as
Defined benefit plans exception. For purposes of
adjusted annually, is published during the fourth quarter of
determining the amount of nondeductible contributions
the prior calendar year in the Internal Revenue Bulletin.
subject to the 10% excise tax, the employer may elect not to
include any contributions to a defined benefit plan except, in Schedule C. Tax on Prohibited
the case of a multiemployer plan, to the extent those
contributions exceed the full-funding limitation (as defined in Transactions (Section 4975)
section 431(c)(6)). This election applies to terminated and
Section 4975. Section 4975 imposes an excise tax on a
ongoing plans. An employer making this election cannot also
disqualified person who engages in a prohibited transaction
benefit from the exceptions for terminating plans and for
with the plan.
certain contributions to defined contribution plans under
section 4972(c)(6). When determining the amount of Plan. For purposes of this section, the term “plan” means
nondeductible contributions, the deductible limits under any of the following.
section 404(a)(7) must be applied first to contributions to • A trust described in section 401(a) that forms part of a
defined contribution plans and then to contributions to plan.
defined benefit plans. • A plan described in section 403(a) that is exempt from tax
under section 501(a).
Defined contribution plans exception. In determining
the amount of nondeductible contributions subject to the 10% • An individual retirement account described in
section 408(a).
excise tax, do not include any of the following.
• Employer contributions to one or more defined contribution • An individual retirement annuity described in
section 408(b).
plans that are nondeductible solely because of
section 404(a)(7) that do not exceed the matching • An Archer MSA described in section 220(d).
contributions described in section 401(m)(4)(A). • A Coverdell education savings account described in
section 530.
• Contributions to a SIMPLE 401(k) or a SIMPLE IRA
considered nondeductible because they are not made in • A Health Savings Account (HSA) described in section
223(d).
connection with the employer's trade or business. However,
this provision pertaining to SIMPLEs does not apply to • A trust described in section 501(c)(22).

Instructions for Form 5330 7

- 8 -

Page 8 of 15         Fileid: … ns/i5330/202312/a/xml/cycle03/source                                   17:32 - 19-Jan-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Note. For purposes of section 4975, the term “plan” does not       3. Furnishing of goods, services, or facilities between a 
include a section 403(b) tax-sheltered annuity plan. See           plan and a disqualified person;
section 4975(e).                                                   4. Transfer to, or use by or for the benefit of, a disqualified 
        If the IRS determined at any time that your plan was a     person of income or assets of a plan;
  !     plan as defined above, it will always remain subject to    5. Act by a disqualified person who is a fiduciary dealing 
CAUTION the excise tax on prohibited transactions under            with the income or assets of a plan in the disqualified 
section 4975. This also applies to the tax on minimum              person’s own interest or account; or
funding deficiencies under section 4971.                           6. Receipt of any consideration for a disqualified person’s 
  Disqualified person.    A “disqualified person” is a person      own personal account by any disqualified person who is a 
who is any of the following.                                       fiduciary from any party dealing with the plan connected with 
  1. A fiduciary.                                                  a transaction involving the income or assets of the plan.
  2. A person providing services to the plan.                      Exemptions.    See sections 4975(d), 4975(f)(6)(B)(ii), and 
  3. An employer, any of whose employees are covered by            4975(f)(6)(B)(iii) for specific exemptions to prohibited 
the plan.                                                          transactions. Also, see section 4975(c)(2) for certain other 
                                                                   transactions or classes of transactions that may become 
  4. An employee organization, any of whose members are            exempt.
covered by the plan.
                                                                   Line 1. Check the box that best characterizes the prohibited 
  5. A direct or indirect owner of 50% or more of:                 transaction for which an excise tax is being paid. A prohibited 
  a. The combined voting power of all classes of stock             transaction is discrete unless it is of an ongoing nature. 
entitled to vote, or the total value of shares of all classes of   Transactions involving the use of money (loans, etc.) or other 
stock of a corporation;                                            property (rent, etc.) are of an ongoing nature and will be 
  b. The capital interest or the profits interest of a             treated as a new prohibited transaction on the first day of 
partnership; or                                                    each succeeding tax year or part of a tax year that is within 
  c. The beneficial interest of a trust or unincorporated          the taxable period.
enterprise in (a), (b), or (c), which is an employer or an         Line 2, column (b). List the date of all prohibited 
employee organization described in (3) or (4) above. A             transactions that took place in connection with a particular 
limited liability company should be treated as a corporation or    plan during the current tax year. Also, list the date of all 
a partnership, depending on how the organization is treated        prohibited transactions that took place in prior years unless 
for federal tax purposes.                                          either the transaction was corrected in a prior tax year or the 
  6. A member of the family of any individual described in         section 4975(a) tax was assessed in the prior tax year. A 
(1), (2), (3), or (5). A “member of a family” is the spouse,       disqualified person who engages in a prohibited transaction 
ancestor, lineal descendant, and any spouse of a lineal            must file a separate Form 5330 to report the excise tax due 
descendant.                                                        under section 4975 for each tax year.
  7. A corporation, partnership, or trust or estate of which       Line 2, columns (d) and (e).       The “amount involved in a 
(or in which) any direct or indirect owner holds 50% or more       prohibited transaction” means the greater of the amount of 
of the interest described in (5a), (5b), or (5c) of such entity.   money and the fair market value (FMV) of the other property 
For this purpose, the beneficial interest of the trust or estate   given, or the amount of money and the FMV of the other 
is owned, directly or indirectly, or held by persons described     property received. However, for services described in 
in (1) through (5).                                                sections 4975(d)(2) and (10), the amount involved only 
  8. An officer, director (or an individual having powers or       applies to excess compensation. For purposes of
responsibilities similar to those of officers or directors), a 10% section 4975(a), FMV must be determined as of the date on 
or more shareholder or highly compensated employee                 which the prohibited transaction occurs. If the use of money 
(earning 10% or more of the yearly wages of an employer) of        or other property is involved, the amount involved is the 
a person described in (3), (4), (5), or (7).                       greater of the amount paid for the use or the FMV of the use 
                                                                   for the period for which the money or other property is used. 
  9. A 10% or more (in capital or profits) partner or joint        In addition, transactions involving the use of money or other 
venturer of a person described in (3), (4), (5), or (7).           property will be treated as giving rise to a prohibited 
  10. Any disqualified person, as described in (1) through (9)     transaction occurring on the date of the actual transaction, 
above, who is a disqualified person with respect to any plan       plus a new prohibited transaction on the first day of each 
to which a section 501(c)(22) trust applies, that is permitted     succeeding tax year or portion of a succeeding tax year 
to make payments under section 4223 of the Employee                which is within the taxable period. The “taxable period” for 
Retirement Income Security Act (ERISA).                            this purpose is the period of time beginning with the date of 
  Prohibited transaction.    A “prohibited transaction” is any     the prohibited transaction and ending with the earliest of:
direct or indirect:                                                1. The date the correction is completed,
  1. Sale or exchange, or leasing of any property between          2. The date of the mailing of a notice of deficiency, or
a plan and a disqualified person; or a transfer of real or         3. The date on which the tax under section 4975(a) is 
personal property by a disqualified person to a plan where         assessed.
the property is subject to a mortgage or similar lien placed on 
the property by the disqualified person within 10 years prior      See the instructions for Schedule C, under Additional tax for 
to the transfer, or the property transferred is subject to a       failure to correct the prohibited transaction (section 4975(b)), 
mortgage or similar lien which the plan assumes;                   for the definition of “correction.”
  2. Lending of money or other extension of credit between 
a plan and a disqualified person;

8                                                                                                     Instructions for Form 5330

- 9 -

Page 9 of 15 Fileid: … ns/i5330/202312/a/xml/cycle03/source 17:32 - 19-Jan-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Figure 1. Example for the Calendar 2022 Plan Year Used When Filing for the 2022 Tax Year
Schedule C. Tax on Prohibited Transactions (Section 4975) (see instructions) Reported by the last day of the 7th
month after the end of the tax year of the employer (or other person who must file the return)
(a) (b) Date of (d) Amount involved in prohibited (e) Initial tax on prohibited
Transaction transaction (c) Description of prohibited transaction transaction (see instructions) transaction (multiply each
number (see transaction in column (d) by the
instructions) appropriate rate (see
instructions))
(i) 7-1-22 Loan $6,000 $900
(ii)
(iii)
3 Add amounts in column (e). Enter here and on Part I, line 3a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ▶ $900

Temporary Regulations section 141.4975-13 states on December 31, 2022, and the second occurring on
! that, until final regulations are written under section January 1, 2023, and ending on December 31, 2023.
CAUTION 4975(f), the definitions of amount involved and
Section 4975(a) imposes a 15% excise tax on the amount
correction found in Regulations section 53.4941(e)-1 will involved for each tax year or part thereof in the taxable period
apply. of each prohibited transaction.
Failure to transmit participant contributions. For The Form 5330 for the year ending December 31,
purposes of calculating the excise tax on a prohibited 2022. The amount involved to be reported in Form 5330,
transaction where there is a failure to transmit participant Schedule C, line 2, column (d), for the 2022 plan year, is
contributions (elective deferrals) or amounts that would have $6,000 (6 months x $1,000). The tax due is $900 ($6,000 x
otherwise been payable to the participant in cash, the 15%). (See Figure 1 above.) (Any interest and penalties
amount involved is based on interest on those elective imposed for the delinquent filing of Form 5330 and the
deferrals. See Rev. Rul. 2006-38. delinquent payment of the excise tax for 2022 will be billed
Column (e). The initial tax on a prohibited transaction is separately to the disqualified person.)
15% of the amount involved in each prohibited transaction for
The Form 5330 for the year ending December 31,
each year or part of a year in the taxable period. Multiply the
2023. The excise tax to be reported on the 2023 Form 5330
amount in column (d) by 15%.
would include both the prohibited transaction of July 1, 2022,
Example. The example of a prohibited transaction below with an amount involved of $6,000, resulting in a tax due of
does not cover all types of prohibited transactions. For more $900 ($6,000 x 15%), and the second prohibited transaction
examples, see Regulations section 53.4941(e)-1(b)(4). of January 1, 2023, with an amount involved of $12,000 (12
A disqualified person borrows money from a plan in a months x $1,000), resulting in a tax due of $1,800 ($12,000 x
prohibited transaction under section 4975. The FMV of the 15%). (See Figure 2, later.) The taxable period for the second
use of the money and the actual interest on the loan is $1,000 prohibited transaction runs from January 1, 2023, through
per month (the actual interest is paid in this example). The December 31, 2023 (date of correction). Because there are
loan was made on July 1, 2022 (date of transaction), and two prohibited transactions with taxable periods running
repaid on December 31, 2023 (date of correction). The during 2023, the section 4975(a) tax is due for the 2023 tax
disqualified person's tax year is the calendar year. On July year for both prohibited transactions.
31, 2024, the disqualified person files a delinquent Form When a loan from a qualified plan that is a prohibited
5330 for the 2022 plan year (which in this case is the TIP transaction spans successive tax years, constituting
calendar year) and a timely Form 5330 for the 2023 plan year multiple prohibited transactions, and during those
(which in this case is the calendar year). No notice of years the first tier prohibited transaction excise tax rate
deficiency with respect to the tax imposed by section 4975(a) changes, the first tier excise tax liability for each prohibited
has been mailed to the disqualified person and no transaction is the sum of the products resulting from
assessment of such excise tax has been made by the IRS multiplying the amount involved for each year in the taxable
before the time the disqualified person filed the Forms 5330. period for that prohibited transaction by the excise tax rate in
Each prohibited transaction has its own separate taxable effect at the beginning of that taxable period. For more
period that begins on the date the prohibited transaction information, see Rev. Rul. 2002-43, 2002-32 I.R.B. 85 at
occurred or is deemed to occur and ends on the date of the www.irs.gov/pub/irs-irbs/irb02-28.pdf. Unlike the previous
correction. The taxable period that begins on the date the example, the example in Rev. Rul. 2002-43 contains unpaid
loan occurs runs from July 1, 2022 (date of loan), through interest.
December 31, 2023 (date of correction). When a loan is a
prohibited transaction, the loan is treated as giving rise to a Additional tax for failure to correct the prohibited
prohibited transaction on the date the transaction occurs, and transaction (section 4975(b)). To avoid liability for
an additional prohibited transaction on the first day of each additional taxes and penalties, and in some cases further
succeeding tax year (or portion of a tax year) within the initial taxes, a correction must be made within the taxable
taxable period that begins on the date the loan occurs. period. The term “correction” is defined as undoing the
Therefore, in this example, there are two prohibited prohibited transaction to the extent possible, but in any case
transactions, the first occurring on July 1, 2022, and ending placing the plan in a financial position not worse than that in

Instructions for Form 5330 9

- 10 -

Page 10 of 15 Fileid: … ns/i5330/202312/a/xml/cycle03/source 17:32 - 19-Jan-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Figure 2. Example for the Calendar 2023 Plan Year Used When Filing for the 2023 Tax Year
Schedule C. Tax on Prohibited Transactions (Section 4975) (see instructions) Reported by the last day of the 7th
month after the end of the tax year of the employer (or other person who must file the return)
(a) (b) Date of (d) Amount involved in prohibited (e) Initial tax on prohibited
Transaction transaction (c) Description of prohibited transaction transaction (see instructions) transaction (multiply each
number (see transaction in column (d) by the
instructions) appropriate rate (see
instructions))
(i) 7-1-22 Loan $6,000 $900
(ii) 1-1-23 Loan $12,000 $1,800
(iii)
3 Add amounts in column (e). Enter here and on Part I, line 3a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ▶ $2,700

which it would be if the disqualified person were acting under Correcting certain prohibited transactions. Generally,
the highest fiduciary standards. if a disqualified person enters into a direct or indirect
If the prohibited transaction is not corrected within the prohibited transaction, listed in (1) through (4) below, in
taxable period, an additional tax equal to 100% of the amount connection with the acquisition, holding, or disposition of
involved will be imposed under section 4975(b). Any certain securities or commodities, and the transaction is
disqualified person who participated in the prohibited corrected within the correction period, it will not be treated as
transaction (other than a fiduciary acting only as such) must a prohibited transaction and no tax will be assessed.
pay this tax imposed by section 4975(b). Report the 1. Sale or exchange, or leasing of any property between
additional tax on Part I, Section A, line 3b. a plan and a disqualified person.
Line 4. Check “No” if there has not been a correction of all of 2. Lending of money or other extension of credit between
the prohibited transactions by the end of the tax year for a plan and a disqualified person.
which this Form 5330 is being filed. Attach a statement 3. Furnishing of goods, services, or facilities between a
including item number from line 2a and description indicating plan and a disqualified person.
when the correction will be made. 4. Transfer to, or use by or for the benefit of, a disqualified
Line 5. If more than one disqualified person participated in person of income or assets of a plan.
the same prohibited transaction, list on this schedule the
However, if, at the time the transaction was entered into,
name, address, and SSN or EIN of each disqualified person,
the disqualified person knew or had reason to know that the
other than the disqualified person who files this return.
transaction was prohibited, the transaction would be subject
For all transactions, complete columns (a), (b), and (c). If to the tax on prohibited transactions.
the transaction has been corrected, complete columns (a)
For purposes of section 4975(d)(23), the term “correct”
through (e). If additional space is needed, you may attach a
means to:
statement fully explaining the correction and identifying
persons involved in the prohibited transaction. • Undo the transaction to the extent possible and in all cases
to make good to the plan or affected account any losses
Prohibited transactions and investment advice. The resulting from the transaction, and
prohibited transaction rules of section 4975(c) will not apply • Restore to the plan or affected account any profits made
to any transaction in connection with investment advice if the through the use of assets of the plan.
investment advice provided by a fiduciary adviser is provided The “correction period” is the 14-day period beginning on
under an eligible investment advice arrangement. the date on which the disqualified person discovers or
For this purpose, an “eligible investment advice reasonably should have discovered that the transaction
arrangement” is an arrangement that either: constitutes a prohibited transaction.
• Provides that any fees, including any commission or other
compensation, received by the fiduciary adviser for Schedule D. Tax on Failure To Meet
investment advice or with respect to the sale, holding, or Minimum Funding Standards
acquisition of any security or other property for the
investment of plan assets do not vary depending on the basis (Section 4971(a))
of any investment option selected; or In the case of a single-employer plan, section 4971(a)
• Uses a computer model under an investment advice imposes a 10% tax on the aggregate unpaid minimum
program, described in section 4975(f)(8)(C), in connection required contributions for all plan years remaining unpaid as
with investment advice provided by a fiduciary adviser to a of the end of any plan year. In the case of a multiemployer
participant or beneficiary. plan, section 4971(a) imposes a 5% tax on the amount of the
Additionally, the eligible investment advice arrangement must accumulated funding deficiency determined as of the end of
meet the provisions of sections 4975(f)(8)(D), (E), (F), (G), the plan year.
(H), and (I).
For purposes of the statutory exemption on investment If a plan fails to meet the funding requirements under
advice, a “fiduciary adviser” is defined in section 412, the employer and all controlled group members
section 4975(f)(8)(J). will be subject to excise taxes under sections 4971(a) and
(b).

10 Instructions for Form 5330

- 11 -

Page 11 of 15 Fileid: … ns/i5330/202312/a/xml/cycle03/source 17:32 - 19-Jan-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Except in the case of a multiemployer plan, all members of additional tax will be imposed under section 4971(f)(2) equal
a controlled group are jointly and severally liable for this tax. to the amount on which tax was imposed by
A “controlled group” in this case means a controlled group of section 4971(f)(1) for such quarter. Report the additional tax
corporations under section 414(b), a group of trades or on Part I, Section B, line 9b.
businesses under common control under section 414(c), an
affiliated service group under section 414(m), and any other Schedule F. Tax on Multiemployer
group treated as a single employer under section 414(o). Plans in Endangered or Critical
If the IRS determined at any time that your plan was a
Status (Sections
! plan as defined on Schedule C, it will always remain
CAUTION subject to the excise tax on failure to meet minimum 4971(g)(3) and 4971(g)(4))
funding standards. For years beginning after 2007, section 4971(g) imposes an
excise tax on employers who contribute to multiemployer
Line 1. Enter the amount (if any) of the aggregate unpaid plans for failure to comply with a funding improvement or
minimum required contributions (or in the case of a rehabilitation plan, failure to meet requirements for plans in
multiemployer plan, an accumulated funding deficiency as endangered or critical status, or failure to adopt a
defined in section 431(a) (or section 418B if a multiemployer rehabilitation plan. See the instructions for line 10a, earlier.
plan in reorganization)).
Line 1. Under section 4971(g)(3), a multiemployer plan that
Line 2. Multiply line 1 by the applicable tax rate shown below is in seriously endangered status when it fails to meet its
and enter the result. applicable benchmarks by the end of the funding
• 10% for plans other than multiemployer plans. improvement period will be treated as having an accumulated
• 5% for all multiemployer plans. funding deficiency for the last plan year in such period and
Additional tax for failure to correct. For single-employer each succeeding year until the funding benchmarks are met.
plans, when an initial tax is imposed under section 4971(a)
on any unpaid minimum required contribution and the unpaid Similarly, a plan that is in critical status and either fails to
minimum required contribution remains unpaid as of the meet the requirements of section 432 by the end of the
close of the taxable period, an additional tax of 100% of the rehabilitation period, or has received certification under
amount that remains unpaid is imposed under section section 432(b)(3)(A)(ii) for 3 consecutive plan years that the
4971(b). plan is not making the scheduled progress in meeting its
requirements under the rehabilitation plan, will be treated as
For multiemployer plans, when an initial tax is imposed having an accumulated funding deficiency for the last plan
under section 4971(a)(2) on an accumulated funding year in such period and each succeeding plan year until the
deficiency and the accumulated funding deficiency is not funding requirements are met.
corrected within the taxable period, an additional tax equal to
100% of the accumulated funding deficiency, to the extent In both cases, the accumulated funding deficiency is an
not corrected, is imposed under section 4971(b). amount equal to the greater of the amount of the
contributions necessary to meet the benchmarks or
For this purpose, the “taxable period” is the period requirements, or the amount of the accumulated funding
beginning with the end of the plan year where there is an deficiency without regard to this rule. The existence of an
unpaid minimum required contribution or an accumulated accumulated funding deficiency triggers the initial 5% excise
funding deficiency and ending on the earlier of: tax under section 4971(a).
• The date the notice of deficiency for the section 4971(a)
excise tax is mailed, or A plan is in “endangered status” if either of the following
• The date the section 4971(a) excise tax is assessed. occurs.
• The plan's actuary timely certifies that the plan is not in
Report the tax for failure to correct the unpaid minimum critical status for that plan year and at the beginning of that
required contribution or the accumulated funding deficiency plan year the plan's funded percentage for the plan year is
on Part I, Section B, line 8b. less than 80%.
Schedule E. Tax on Failure To Pay • The plan has an accumulated funding deficiency for the
plan year or is projected to have such an accumulated
Liquidity Shortfall (Section 4971(f)(1)) funding deficiency for any of the 6 succeeding plan years,
If your plan has a liquidity shortfall for which an excise tax taking into account any extension of amortization periods
under section 4971(f)(1) is imposed for any quarter of the under section 431(d).
plan year, complete lines 1 through 4. A plan is in “critical status” if it is determined by the
multiemployer plan's actuary that one of the four formulas in
Line 1. Enter the amount of the liquidity shortfall(s) for each
section 432(b)(2) is met for the applicable plan year.
quarter of the plan year.
All or part of this excise tax may be waived due to
Line 2. Enter the amount of any contributions made to the reasonable cause.
plan by the due date of the required quarterly installment(s)
that partially corrected the liquidity shortfall(s) reported on Line 2. Under section 4971(g)(4), the plan sponsor of a
line 1. multiemployer plan in critical status, as defined above, will be
liable for an excise tax for failure to adopt a rehabilitation plan
Line 3. Enter the net amount of the liquidity shortfall. within the time prescribed under section 432. The tax is equal
(Subtract line 2 from line 1.) to the greater of:
Additional tax for failure to correct liquidity shortfall. • The amount of tax imposed under section 4971(a)(2); or
If the plan has a liquidity shortfall as of the close of any • An amount equal to $1,100, multiplied by the number of
quarter and as of the close of the following 4 quarters, an days in the tax year which are included in the period that
begins on the first day following the close of the 240-day

Instructions for Form 5330 11

- 12 -

Page 12 of 15 Fileid: … ns/i5330/202312/a/xml/cycle03/source 17:32 - 19-Jan-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

period that a multiemployer plan has to adopt a rehabilitation employer contributions that could have been made without
plan once it has entered critical status and that ends on the violating the special nondiscrimination requirements of
day the rehabilitation plan is adopted. Section 432(e)(1)(A) section 401(k)(3) or section 408(k)(6) in the instance of
allows the plan sponsor to adopt a rehabilitation plan within certain SEPs.
the 240-day period following the required date for the
actuarial certification of critical status in section 432(b)(3)(A). The excess aggregate contributions subject to the section
4979 excise tax are equal to the amount by which the
Liability for this tax is imposed on each plan sponsor. This aggregate matching contributions of the employer and the
excise tax may not be waived. employee contributions (and any qualified nonelective
Follow the instructions as defined above for counting contribution or elective contribution taken into account in
computing the contribution percentage under section
CAUTION
! days and completing line 2b. 401(m)) actually made on behalf of the highly compensated
employees for each plan year exceed the maximum amount
Complete line 2b as instructed below. Enter the number of of contributions permitted in the contribution percentage
days during the tax year that are included in the period computation under section 401(m)(2)(A).
beginning on the first day following the close of the 240-day
period and ending on the day the rehabilitation plan is However, there is no excise tax liability if the excess
adopted. contributions or the excess aggregate contributions and any
income earned on the contributions are distributed (or, if
Schedule G. Tax on Excess Fringe forfeitable, forfeited) to the participants for whom the excess
contributions were made within 2 / months after the end of 1 2
Benefits (Section 4977) the plan year.
If you made an election to be taxed under section 4977 to
continue your nontaxable fringe benefit policy that was in Schedule I. Tax on Reversion of
existence on or after January 1, 1984, check “Yes” on line 1
Qualified Plan Assets to an Employer
and complete lines 2 through 4.
Line 3. Excess fringe benefits are calculated by subtracting (Section 4980)
1% of the aggregate compensation paid by you to your Section 4980 imposes an excise tax on an employer
employees during the calendar year that was includible in reversion of qualified plan assets to an employer. Generally,
their gross income from the aggregate value of the the tax is 20% of the amount of the employer reversion. The
nontaxable fringe benefits under sections 132(a)(1) and (2). excise tax rate increases to 50% if the employer does not
establish or maintain a qualified replacement plan following
Schedule H. Tax on Excess the plan termination or provide certain pro-rata benefit
increases in connection with the plan termination. See
Contributions to Certain Plans section 4980(d)(1)(A) or (B) for more information.
(Section 4979) An “employer reversion” is the amount of cash and the
Any employer who maintains a plan described in section FMV of property received, directly or indirectly, by an
401(a), 403(a), 403(b), 408(k), or 501(c)(18) may be subject employer from a qualified plan. For exceptions to this
to an excise tax on excess aggregate contributions made on definition, see section 4980(c)(2)(B) and section 4980(c)(3).
behalf of highly compensated employees. The employer may
also be subject to an excise tax on excess contributions to a A “qualified plan” is:
cash or deferred arrangement connected with the plan. • Any plan meeting the requirements of section 401(a) or
403(a), other than a plan maintained by an employer if that
The tax is on the excess contributions and the excess employer has at all times been exempt from federal income
aggregate contributions made to or on behalf of the highly tax; or
compensated employees as defined in section 414(q). • A governmental plan within the meaning of section 414(d).
Terminated defined benefit plan. If a defined benefit
Generally, a “highly compensated employee” is an
plan is terminated, and an amount in excess of 25% of the
employee who:
maximum amount otherwise available for reversion is
1. Was a 5% owner at any time during the year or the transferred from the terminating defined benefit plan to a
preceding year; or defined contribution plan, the amount transferred is not
2. For the preceding year, had compensation from the treated as an employer reversion for purposes of
employer in excess of a dollar amount for the year ($150,000 section 4980. However, the amount the employer receives is
for 2023) and, if the employer so elects, was in the top paid subject to the 20% excise tax. For additional information, see
group for the preceding year. Rev. Rul. 2003-85, 2003-32 I.R.B. 291 at www.irs.gov/irb/
2003-32_IRB/ar11.html.
An employee is in the “top-paid group” for any year if the
employee is in the group consisting of the top 20% of Lines 1 through 4. Enter the date of reversion on line 1.
employees when ranked on the basis of compensation paid. Enter the reversion amount on line 2a and the applicable
An employee (who is not a 5% owner) who has excise tax rate on line 2b. If you use a tax percentage other
compensation in excess of $150,000 is not a highly than 50% on line 2b, explain on line 4 why you qualify to use
compensated employee if the employer elects the top-paid a rate other than 50%.
group limitation and the employee is not a member of the
top-paid group.
The excess contributions subject to the section 4979
excise tax are equal to the amount by which employer
contributions actually paid over to the trust exceed the

12 Instructions for Form 5330

- 13 -

Page 13 of 15 Fileid: … ns/i5330/202312/a/xml/cycle03/source 17:32 - 19-Jan-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

If the person subject to liability for the excise tax exercised
Schedule J. Tax on Failure To Provide
reasonable diligence to meet the notice requirement, the total
Notice of Significant Reduction in excise tax imposed during a tax year of the employer will not
exceed $500,000. Furthermore, in the case of a failure due to
Future Accruals (Section 4980F) reasonable cause and not to willful neglect, the Secretary of
Section 204(h) notice. Section 4980F imposes an excise the Treasury is authorized to waive the excise tax to the
tax on an employer (or, in the case of a multiemployer plan, extent that the payment of the tax would be excessive relative
the plan) for failure to give section 204(h) notice of plan to the failure involved. See Rev. Proc. 2013-4, 2013-1 I.R.B.
amendments that provide for a significant reduction in the 123, as revised by subsequent documents, available at
rate of future benefit accrual or the elimination or significant www.irs.gov/irb/2013-01_IRB/ar09.html, for procedures to
reduction of an early retirement benefit or retirement-type follow in applying for a waiver of part or all of the excise tax
subsidy. The tax is $100 per day per each applicable due to reasonable cause.
individual and each employee organization representing Line 4. A failure occurs on any day that any applicable
participants who are applicable individuals for each day of individual (AI) is not provided section 204(h) notice.
the noncompliance period. This notice is called a “section
204(h) notice” because section 204(h) of ERISA has parallel Example. There are 1,000 AIs. The plan administrator
notice requirements. fails to give section 204(h) notice to 100 AIs for 60 days, and
to 50 of those AIs for an additional 30 days. In this case, there
An “applicable individual” is a participant in the plan, or an are 7,500 failures ((100 AIs x 60 days) + (50 AIs x 30 days) =
alternate payee of a participant under a qualified domestic 7,500).
relations order, whose rate of future benefit accrual (or early
retirement benefit or retirement-type subsidy) under the plan Schedule K. Tax on Prohibited Tax
may reasonably be expected to be significantly reduced by a
plan amendment. (For plan years beginning after December Shelter Transactions (Section 4965)
31, 2007, the requirement to give 204(h) notice was extended Section 4965 provides that an entity manager of a tax-exempt
to an employer who has an obligation to contribute to a organization may be subject to an excise tax on prohibited
multiemployer plan.) tax shelter transactions under section 4965. In the case of a
Whether a participant, alternate payee, or an employer (as plan entity, an entity manager is any person who approves or
described in the above paragraph) is an applicable individual otherwise causes the tax-exempt entity to be a party to a
is determined on a typical business day that is reasonably prohibited tax shelter transaction. The excise tax is $20,000
approximate to the time the section 204(h) notice is provided and is assessed for each approval or other act causing the
(or on the latest date for providing section 204(h) notice, if organization to be a party to the prohibited tax shelter
earlier), based on all relevant facts and circumstances. For transaction.
more information in determining whether an individual is a
participant or alternate payee, see Regulations Schedule L. Tax on Failure of a
section 54.4980F-1, Q&A 10. Cooperative and Small Employer
The “noncompliance period” is the period beginning on Charity (CSEC) Plan Sponsor To
the date the failure first occurs and ending on the date the
notice of failure is provided or the failure is corrected. Adopt Funding Restoration Plan
Exceptions. The section 4980F excise tax will not be
imposed for a failure during any period in which the following (Section 4971(h))
occurs. A CSEC plan is:
1. Any person subject to liability for the tax did not know • a defined benefit plan (other than a multiemployer plan)
including an eligible cooperative plan (as defined in section
that the failure existed and exercised reasonable diligence to 104 of the PPA ‘06);
meet the notice requirement. A person is considered to have a plan that, as of June 25, 2010, was maintained by more
exercised reasonable diligence but did not know the failure •
than one section 501(c)(3) organization;
existed only if: a plan that, as of June 25, 2010, was maintained by a
•
a. The responsible person exercised reasonable single employer that was a 501(c)(3) organization chartered
diligence in attempting to deliver section 204(h) notice to under Part B, Subtitle II, Title 36 of the U.S.C., whose primary
applicable individuals by the latest date permitted; or exempt purpose is to provide services with respect to
b. At the latest date permitted for delivery of section children, and which has employees in at least 40 states; or
204(h) notice, the person reasonably believed that section • any plan that, as of January 1, 2000, was maintained by an
204(h) notice was actually delivered to each applicable employer that is a 501(c)(3) organization, has been in
individual by that date. existence since at least 1938, conducts medical research
2. Any person subject to liability for the tax exercised directly or indirectly through grant making, and has a primary
reasonable diligence to meet the notice requirement and exempt purpose to provide services with respect to mothers
corrects the failure within 30 days after the employer (or other and children (section 414(y)(1), amended by section 3609 of
person responsible for the tax) knew, or exercising the Coronavirus Aid, Relief, and Economic Security (CARES)
reasonable diligence would have known, that the failure Act (P.L. 116-136)).
existed. Section 433(j)(3) requires a CSEC plan sponsor to
Generally, section 204(h) notice must be provided at least establish a written funding restoration plan within 180 days of
45 days before the effective date of the section 204(h) the receipt by the plan sponsor of a certification from the plan
amendment. For exceptions to this rule, see Regulations actuary that the plan is in funding restoration status for a plan
section 54.4980F-1, Q&A 9. year. Section 4971(h) imposes an excise tax on the CSEC
plan sponsor for the plan in funding restoration status for the

Instructions for Form 5330 13

- 14 -

Page 14 of 15 Fileid: … ns/i5330/202312/a/xml/cycle03/source 17:32 - 19-Jan-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

failure to adopt a funding restoration plan within the time administering their tax laws. We may also disclose this
prescribed under section 433(j)(3). information to federal and state or local agencies to enforce
A CSEC plan is treated as being in funding restoration federal nontax criminal laws and to combat terrorism.
status for a plan year if the plan's funded percentage as of You are not required to provide the information requested
the beginning of such plan year is less than 80%. Funded on a form that is subject to the Paperwork Reduction Act
percentage means the ratio that the value of plan assets unless the form displays a valid OMB control number. Books
bears to the plan's funding liability. or records relating to a form or its instructions must be
Line 1. Under section 4971(h)(2), the excise tax amount with retained as long as their contents may become material in the
respect to any CSEC plan sponsor for any tax year should be administration of any Internal Revenue law. Generally, tax
the amount equal to $100 multiplied by the number of days returns and return information are confidential, as required by
during the tax year that are included in the period beginning section 6103.
on the day following the close of the 180-day period The time needed to complete and file this form will vary
described in section 433(j)(3) and ending on the day on depending on individual circumstances. The estimated
which the funding restoration plan is adopted. average time is:
Line 2. Calculate the excise tax amount by multiplying days
entered on line 1 by $100. Enter the excise tax amount on Recordkeeping. . . . . . . . . . . 30 hr., 22 min.
line 2 and on Part I, line 10d. Learning about the law or
All or part of this excise tax may be waived if the IRS the form. . . . . . . . . . . . . . . . 15 hr., 45 min.
determines that a failure is due to reasonable cause and not Preparing and sending the
to willful neglect. form to the IRS. . . . . . . . . . . 18 hr., 08 min.
Privacy Act and Paperwork Reduction Act Notice. We
ask for the information on this form to carry out the Internal
Revenue laws of the United States. This form is required to If you have comments concerning the accuracy of these
be filed under sections 4965, 4971, 4972, 4973, 4975, 4976, time estimates or suggestions for making this form simpler,
4977, 4978, 4979, 4979A, 4980, and 4980F of the Internal we would be happy to hear from you. You can send us
Revenue Code. Section 6109 requires you to provide your comments from IRS.gov/FormsComments. Or you can write
identifying number. If you fail to provide this information in a to the Internal Revenue Service, Tax Forms and Publications
timely manner, you may be liable for penalties and interest. Division, 1111 Constitution Ave. NW, IR-6526, Washington,
Routine uses of this information include giving it to the DC 20224. Do not send Form 5330 to this address. Instead,
Department of Justice for civil and criminal litigation, and to see Where To File, earlier.
cities, states, and the District of Columbia for use in

14 Instructions for Form 5330

- 15 -

Page 15 of 15           Fileid: … ns/i5330/202312/a/xml/cycle03/source        17:32 - 19-Jan-2024

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Index
 
                                     Late payment  3                         Purpose of form  1
A                                    Liquidity shortfall:
Amended return    3 6,                 Additional tax 11                     Q
Amount involved   5                  Listed transaction   6                  Qualified ESOP securities                   5

C                                    M                                       R
Claim for refund 3                   Minimum funding standards,              Reversion of qualified plan 
                                       failure 10                             assets 12
D                                                                             Qualified plan 12
                                     N
Disqualified benefit, funded welfare                                          Terminated defined benefit plan             12
  plans  4                           Nonallocation period    5
Disqualified person 10               Nondeductible employer                  S
Due dates   3                          contributions  7                      Section 403(b) plan  7
                                       Exception, defined benefit plan   7   Section 4965  6 13, 
E                                      Exception, defined contribution       Section 4971(a) 10
                                       plan    7
Eligible investment advice                                                   Section 4971(b)  10
  arrangement  10                      Nondeductible contributions     7     Section 4971(f) 11
Employer reversion  12                 Qualified plan 7                      Section 4971(g)  11
Entity manager 6                     Notice of significant reduction in      Section 4971(g)(2)  6
                                       future accruals    13
ESOP 5                                                                       Section 4971(g)(3)  11
                                       Applicable individual 13
  Prohibited allocations 5                                                   Section 4971(g)(4)  11
ESOP dispositions   5                P                                       Section 4971(h)  13
Excess contributions:                                                        Section 4972  7
  403(b)(7) plans 7                  Payment of taxes    6                   Section 4973(a)(3)  7
  Section 4979 12                    Penalty 3                               Section 4975  7
Excise tax due dates   3 5,            Late payment   3                      Section 4976  4
Extension   2                        Private delivery services 3             Section 4977  12
                                     Prohibited allocation:                  Section 4979  12
F                                      Disqualified person  6                Section 4979A  5
                                       ESOP  5
Form 5558   2                                                                Section 4980  12
                                       Nonallocation period  5
Funded welfare plans   4                                                     Section 4980F  13
                                       Synthetic equity  5                   Summary of taxes due  4
                                       Worker-owned cooperative  5
H                                                                            Synthetic equity 5
                                     Prohibited reportable transaction     6  Amount involved    5
How to file 2                        Prohibited tax shelter transaction    6
                                       Entity manager 6                      T
I                                    Prohibited transaction   7
                                                                             Table of due dates  3
Interest 3                             Correcting 10
Investment advice  10                  Correction period  10
                                                                             W
                                       Definition 8
L                                      Disqualified person  8                When to file 2
Late filing 3                          Exemptions  8                         Where to file 2
  Interest 3                           Failure to correct 9                  Who must file 1
  Penalty  3                           Investment advice   10                Worker-owned cooperative                    5

                                                                                                                          15

PDF file checksum: 2375115581

(Plugin #1/9.12/13.0)