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                                                                                             Department of the Treasury
                                                                                             Internal Revenue Service
Instructions for Form 5330

(Rev. December 2022)
Return of Excise Taxes Related to Employee Benefit Plans

Section references are to the Internal Revenue Code unless       1. A plan entity manager of a tax-exempt entity who 
otherwise noted.                                                 approves, or otherwise causes the entity to be party to, a 
                                                                 prohibited tax shelter transaction during the tax year and 
Future Developments                                              knows or has reason to know the transaction is a prohibited 
                                                                 tax shelter transaction under section 4965(a)(2).
For the latest information about developments related to         2. An employer liable for the tax under section 4971 for 
Form 5330 and its instructions, such as legislation enacted      failure to meet the minimum funding standards under
after they were published, go to IRS.gov/Form5330.               section 412.
                                                                 3. An employer liable for the tax under section 4971(f) for 
What’s New                                                       a failure to meet the liquidity requirement of section 430(j) (or 
                                                                 section 412(m)(5) as it existed prior to amendment by the 
New Schedule L.    Form 5330 has been updated to add a           Pension Protection Act of 2006 (PPA '06)), for plans with 
new Schedule L for a cooperative and small employer charity      delayed effective dates under PPA '06.
(CSEC) plan sponsor to report tax on failure to adopt a 
                                                                 4. An employer with respect to a multiemployer plan 
funding restoration plan if the plan is in funding restoration 
                                                                 liable for the tax under section 4971(g)(2) for failure to 
status for a plan year (section 4971(h)).
                                                                 comply with a funding improvement or rehabilitation plan 
                                                                 under section 432.
Reminders                                                        5. An employer with respect to a multiemployer plan 
Electronic filing. Electronic filing (e-filing) is available for liable for the tax under section 4971(g)(3) for failure to meet 
Form 5330. The IRS Modernized e-File (MeF) System is             the requirements for plans in endangered or critical status 
used to file through an IRS Authorized e-File Provider.          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 CSEC plan sponsor liable for the tax under
                                                                 section 4971(h) for failure to adopt a funding restoration plan 
File Form 5330 to report the tax on:
                                                                 within the time required under section 433(j)(3).
• A prohibited tax shelter transaction (section 4965(a)(2));
• A minimum funding deficiency (section 4971(a) and (b));        8. An employer liable for the tax under section 4972 for 
• A failure to pay liquidity shortfall (section 4971(f));        nondeductible contributions to qualified plans.
• A failure to comply with a funding improvement or              9. An individual liable for the tax under section 4973(a)(3) 
rehabilitation plan (section 4971(g)(2));                        because an excess contribution to a section 403(b)(7)(A) 
• A failure to meet requirements for plans in endangered or      custodial account was made for them and that excess has 
critical status (section 4971(g)(3));                            not been eliminated, as specified in sections 4973(c)(2)(A) 
• A failure to adopt rehabilitation plan (section 4971(g)(4));   and (B).
• A failure to adopt funding restoration plan                    10. A disqualified person liable for the tax under
(section 4971(h));                                               section 4975 for participating in a prohibited transaction 
• Nondeductible contributions to qualified plans                 (other than a fiduciary acting only as such), or an individual or 
(section 4972);                                                  the individual’s beneficiary who engages in a prohibited 
• Excess contributions to a section 403(b)(7)(A) custodial       transaction with respect to the individual’s retirement 
account (section 4973(a)(3));                                    account, unless section 408(e)(2)(A) or section 408(e)(4) 
• A prohibited transaction (section 4975);                       applies, for each tax year or part of a tax year in the taxable 
• A disqualified benefit provided by funded welfare plans        period applicable to such prohibited transaction.
(section 4976);
• Excess fringe benefits (section 4977);                         11. An employer liable for the tax under section 4976 for 
• Certain employee stock ownership plan (ESOP)                   maintaining a funded welfare benefit plan that provides a 
dispositions (section 4978);                                     disqualified benefit during any tax year.
• Excess contributions to plans with cash or deferred            12. An employer who pays excess fringe benefits and has 
arrangements (section 4979);                                     elected to be taxed under section 4977 on such payments.
• Certain prohibited allocations of qualified securities by an   13. An employer or worker-owned cooperative, as defined 
ESOP (section 4979A);                                            in section 1042(c)(2), that maintains an employee stock 
• Reversions of qualified plan assets to employers               ownership plan (ESOP) that disposes of the qualified 
(section 4980); and                                              securities, as defined in section 1042(c)(1), within the 
• A failure of an applicable plan reducing future benefit        specified 3-year period (see section 4978).
accruals to satisfy notice requirements (section 4980F).         14. An employer liable for the tax under section 4979 on 
                                                                 excess contributions to plans with a cash or deferred 
Who Must File
                                                                 arrangement, etc.
A Form 5330 must be filed by any of the following.

Dec 20, 2022                                              Cat. No. 11871X

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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.

  15. An employer or worker-owned cooperative that made                       instructions for Schedule C, line 2, columns (d) and (e), for a 
the written statement described in section 664(g)(1)(E) or                    definition of “taxable period.”
1042(b)(3)(B) and made an allocation prohibited under 
section 409(n) of qualified securities of an ESOP taxable                     When To File
under section 4979A; or, an employer or worker-owned                          File one Form 5330 to report all excise taxes with the same 
cooperative who made an allocation of S corporation stock of                  filing due date. However, if the taxes are from separate plans, 
an ESOP prohibited under section 409(p) taxable under                         file separate forms for each plan.
section 4979A.
                                                                              Generally, filing Form 5330 starts the statute of limitations 
  16. An employer who receives an employer reversion from                     running only with respect to the particular excise tax(es) 
a deferred compensation plan taxable under section 4980.                      reported on that Form 5330. However, statutes of limitations 
  17. An employer or multiemployer plan liable for the tax                    with respect to the prohibited transaction excise tax(es) are 
under section 4980F for failure to give notice of a significant               based on the filing of the applicable Form 5500, Annual 
reduction in the rate of future benefit accrual.                              Return/Report of Employee Benefit Plan.
  A Form 5330 and tax payment is required for any of the                      Use Table 1 to determine the due date of Form 5330.
following.
• Each year any of the following under Who Must File,                         Extension. File Form 5558, Application for Extension of 
earlier, apply: (1), (2), (3), (5), (6), (7), (8), (9), (10), (11), (12),     Time To File Certain Employee Plan Returns, to request an 
(13), (14), or (16).                                                          extension of time to file. If approved, you may be granted an 
• Each failure of an employer to make the required                            extension of up to 6 months after the normal due date of 
contribution to a multiemployer plan, as required by a funding                Form 5330.
improvement or rehabilitation plan under section 432.                                Form 5558 does not extend the time to pay your 
• A reversion of plan assets from a qualified plan taxable                    !      taxes. See the instructions for Form 5558.
under section 4980.                                                           CAUTION
• Each year or part of a year in the taxable period in which a 
prohibited transaction occurs under section 4975. See the 

                                                                          -2-                                          Instructions for Form 5330

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How To File                                                         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 
Electronic filing. An employer or an individual required to         time was due to reasonable cause.
file an excise tax return related to employee benefit plans can 
file Form 5330 electronically. All filers are encouraged to file      Interest and penalties for late filing and late payment will 
Form 5330 electronically because it is safe, easy to                be billed separately after the return is filed.
complete, and you have an immediate record that the return 
                                                                    Claim for Refund or Credit/Amended Return
was filed.
                                                                    File an amended Form 5330 for any of the following.
Paper forms for filing. Form 5330 can be filed on paper.            • To claim a refund of overpaid taxes reportable on Form 
You can obtain the official IRS printed Form 5330 found on          5330.
the IRS website and download it to your computer to print           • To receive a credit for overpaid taxes.
and sign before mailing to the address specified in these           • To report additional taxes due within the same tax year of 
instructions. See Where To File below. You can complete             the filer if those taxes have the same due date as those 
paper Form 5330 by hand with pen or typewriter using only           previously reported. Check the box in item H of the Entity 
blue or black ink. Entries should not exceed the lines              Section and report the correct amount of taxes on 
provided on the form. You can find Form 5330 and its                Schedule A through L, as appropriate, and on Part I, lines 1 
instructions by visiting the IRS Internet website at IRS.gov/       through 16. See the instructions for Part II, lines 17 through 
FormsPubs.                                                          19.
Where To File                                                         If you file an amended return to claim a refund or credit, 
        File the paper Form 5330 at the following address:          the claim must state in detail the reasons for claiming the 
                                                                    refund. In order for the IRS to promptly consider your claim, 
        Department of the Treasury                                  you must provide the appropriate supporting evidence. See 
Internal Revenue Service Center                                     Regulations section 301.6402-2 for more details.
Ogden, UT 84201
                                                                    Specific Instructions
Private delivery services (PDSs).  You can use certain              Filer tax year. Enter the tax year of the employer, entity, or 
private delivery services (PDSs) designated by the IRS to           individual on whom the tax is imposed by using the plan year 
meet the “timely mailing as timely filing/paying” rule for tax      beginning and ending dates entered in Part I of Form 5500 or 
returns and payments. Go to IRS.gov/PDS for the current list        by using the tax year of the business return filed.
of designated services.
                                                                    Item A. Name and address of filer.   Enter the name and 
The PDS can tell you how to get written proof of the                address of the employer, individual, or other entity who is 
mailing date.                                                       liable for the tax.
For the IRS mailing address to use if you're using a PDS,             Include the suite, room, or other unit number after the 
go to IRS.gov/PDSstreetAddresses.                                   street number. If the post office does not deliver mail to the 
        Private delivery services cannot deliver items to P.O.      street address and you have a P.O. box, show the box 
                                                                    number instead of the street address.
!       boxes. You must use the U.S. Postal Service to mail 
CAUTION any item to an IRS P.O. box address.                          If the plan has a foreign address, enter the information in 
                                                                    the following order: city or town, state or province, country, 
Interest and Penalties                                              and ZIP or foreign postal code. Follow the country's practice 
                                                                    for entering the postal code. Do not abbreviate the country 
Interest. We are required by law to charge interest when            name.
you do not pay your liability on time. Generally, we calculate 
interest on any unpaid balance from the due date of your            Item B. Filer's identifying number.  Enter the filer's 
return (regardless of extensions of time to file) until you pay     identifying number in the appropriate section. The filer's 
the amount you owe in full, including accrued interest and          identifying number is either the filer's employer identification 
any penalty charges. Interest on some penalties accrues on          number (EIN) or the filer's social security number (SSN), but 
any unpaid balance from the date we notify you of the penalty       not both. The identifying number of an individual, other than a 
until it is paid in full. Interest on other penalties, such as      sole proprietor with an EIN, is the individual’s SSN. The 
failure to file a tax return, starts from the due date or           identifying number for all other filers is their EIN. The EIN is 
extended due date of the return. Interest rates are variable        the nine-digit number assigned to the plan sponsor/
and may change quarterly. (See section 6601.)                       employer, entity, or individual on whom the tax is imposed.
Penalty for late filing of return. If you do not file a return      Item C. Name of plan. Enter the formal name of the plan or 
by the due date, including extensions, you may have to pay a        enough information to identify the plan.
penalty of 5% of the unpaid tax for each month or part of a           This should be the same name indicated on the Form 
month the return is late, up to a maximum of 25% of the             5500 series return/report if that form is required to be filed for 
unpaid tax. The penalty will not be imposed if you can show         the plan.
that the failure to file on time was due to reasonable cause. If    Item D. Name and address of plan sponsor.          The term 
you file late, you may attach a statement to Form 5330              “plan sponsor” means:
explaining the reasonable cause.
                                                                      1. The employer, for an employee benefit plan 
Penalty for late payment of tax.   If you do not pay the tax        established or maintained by a single employer.
when due, you may have to pay a penalty of  /  of 1% of the 1 2
unpaid tax for each month or part of a month the tax is not           2. The employee organization, in the case of a plan of an 
                                                                    employee organization.

Instructions for Form 5330                                       -3-

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3. The association, committee, joint board of trustees, or Generally, a disqualified benefit is any of the following.
other similar group of representatives of the parties who • Any post-retirement medical benefit or life insurance
establish or maintain the plan, if the plan is established or benefit provided for a key employee unless the benefit is
maintained jointly by one or more employers and one or more provided from a separate account established for the key
employee organizations, or by two or more employers. employee under section 419A(d).
• Any post-retirement medical benefit or life insurance
Include the suite, room, or other unit number after the benefit unless the plan meets the nondiscrimination
street number. If the post office does not deliver mail to the requirements of section 505(b) for those benefits.
street address and you have a P.O. box, show the box Any portion of the fund that reverts to the benefit of the
•
number instead of the street address. employer.
If the plan has a foreign address, enter the information in
the following order: city or town, state or province, and Lines 5a and 5b. Section 4978 imposes an excise tax on
country. Follow the country's practice for entering the postal the sale or transfer of securities acquired in a sale or qualified
code. Do not abbreviate the country name. gratuitous transfer to which section 1042 or section 664(g)
applied, respectively, if the sale or transfer takes place within
Item E. Plan sponsor's EIN. Enter the nine-digit EIN 3 years after the date of the acquisition of qualified securities,
assigned to the plan sponsor. This should be the same as defined in section 1042(c)(1) or a section 664(g) transfer.
number used to file the Form 5500 series return/report. The tax is 10% of the amount realized on the disposition of
Item F. Plan year ending. “Plan year” means the calendar the qualified securities if an ESOP or eligible worker-owned
or fiscal year on which the records of the plan are kept. Enter cooperative, as defined in section 1042(c)(2), disposes of the
eight digits in month/date/year order. This number assists the qualified securities within the 3-year period described above,
IRS in properly identifying the plan and time period for which and either of the following applies.
Form 5330 is being filed. For example, a plan year ending • The total number of shares held by that plan or
March 31, 2021, should be shown as 03/31/2021. cooperative after the disposition is less than the total number
of employer securities held immediately after the sale; or
Item G. Plan number. Enter the three-digit number that the
employer or plan administrator assigned to the plan. This • Except to the extent provided in regulations, the value of
qualified securities held by the plan or cooperative after the
three-digit number is used with the EIN entered on item B
disposition is less than 30% of the total value of all employer
and is used by the IRS, the Department of Labor, and the
securities as of the disposition (60% of the total value of all
Pension Benefit Guaranty Corporation as a unique 12-digit
employer securities in the case of any qualified employer
number to identify the plan.
securities acquired in a qualified gratuitous transfer to which
If the plan number is not provided, this will cause a section 664(g) applied).
! delay in processing your return. See section 4978(b)(2) for the limitation on the amount of
CAUTION
tax.
Item H. Amended return. If you are filing an amended The section 4978 tax must be paid by the employer or the
Form 5330, check the box on this line, and see the eligible worker-owned cooperative that made the written
instructions for Part II, lines 17 through 19. Also, see Claim statement described in section 1042(b)(3)(B) on dispositions
for Refund or Credit/Amended Return, earlier. that occurred during their tax year.
Filer's signature. To reduce the possibility of The section 4978 tax does not apply to a distribution of
correspondence and penalties, please sign and date the qualified securities or sale of such securities if any of the
form. Also, enter a daytime phone number where you can be following occurs.
reached. • The death of the employee.
• The retirement of the employee after the employee has
Preparer's signature. Anyone who prepares your return reached age 59 / .1 2
and does not charge you should not sign your return. For The disability of the employee (within the meaning of
•
example, a regular full-time employee or your business section 72(m)(7)).
partner who prepares the return should not sign. The separation of the employee from service for any
•
Generally, anyone who is paid to prepare the return must period that results in a 1-year break in service, as defined in
sign the return in the space provided and fill in the Paid section 411(a)(6)(A).
Preparer's Use Only area. See section 7701(a)(36)(B) for For purposes of section 4978, an exchange of qualified
exceptions. securities in a reorganization described in section 368(a)(1)
In addition to signing and completing the required for stock of another corporation will not be treated as a
information, the paid preparer must give a copy of the disposition.
completed return to the taxpayer.
For section 4978 excise taxes, the amount entered
Note. If Form 5330 is filed on paper, a paid preparer may on Part I, line 5a, is the amount realized on the
sign original or amended returns by rubber stamp, disposition of qualified securities, multiplied by 10%.
mechanical device, or computer software program. Also, check the appropriate box on line 5b.

Part I. Taxes Line 6. Section 4979A imposes a 50% excise tax on
allocated amounts involved in any of the following.
Line 4. Enter the total amount of the disqualified benefit
1. A prohibited allocation of qualified securities by any
under section 4976. Section 4976 imposes an excise tax on
ESOP or eligible worker-owned cooperative.
employers who maintain a funded welfare benefit plan that
provides a disqualified benefit during any tax year. The tax is 2. A prohibited allocation described in
100% of the disqualified benefit. section 664(g)(5)(A). Section 664(g)(5)(A) prohibits any
portion of the assets of the ESOP attributable to securities

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acquired by the plan in a qualified gratuitous transfer to be For purposes of determining a nonallocation year, the
allocated to the account of: 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,
of section 267(b) or a member of the decedent's family within the attribution rules defining family member are modified to
the meaning of section 2032A(e)(2); or include the individual's:
• Spouse,
b. Any person who, at the time of the allocation or at any Ancestor or lineal descendant of the individual or the
•
time during the 1-year period ending on the date of the individual's spouse, and
acquisition of qualified employer securities by the plan, is a A brother or sister of the individual or of the individual's
•
5% shareholder of the employer maintaining the plan. spouse and any lineal descendant of the brother or sister.
3. The accrual or allocation of S corporation shares in an A spouse of an individual legally separated from an
ESOP during a nonallocation year constituting a prohibited individual under a decree of divorce or separate maintenance
allocation under section 409(p). is not treated as the individual's spouse.
4. A synthetic equity owned by a disqualified person in An individual is a disqualified person if:
any nonallocation year. The total number of shares owned by the person and the
•
Prohibited allocations for ESOP or worker-owned members of the person's family, as defined in
cooperative. For purposes of items 1 and 2 above, a section 409(p)(4)(D), is at least 20% of the deemed-owned
“prohibited allocation of qualified securities by any ESOP or shares, as defined in section 409(p)(4)(C), in the S
eligible worker-owned cooperative” is any allocation of corporation; or
qualified securities acquired in a nonrecognition-of-gain sale • The person owns at least 10% of the deemed-owned
under section 1042, which violates section 409(n), and any shares, as defined in section 409(p)(4)(C), in the S
benefit that accrues to any person in violation of corporation.
section 409(n). Under section 409(p)(7), the Secretary of the
Under section 409(n), an ESOP or worker-owned ! Treasury may, through regulations or other guidance
cooperative cannot allow any portion of assets attributable to CAUTION of general applicability, provide that a nonallocation
employer securities acquired in a section 1042 sale to accrue year occurs in any case in which the principal purpose of the
or be allocated, directly or indirectly, to the taxpayer, or any ownership structure of an S corporation constitutes an
person related to the taxpayer, involved in the transaction avoidance or evasion of section 409(p). See Regulations
during the nonallocation period. For purposes of section 1.408(p)-1.
section 409(n), “relationship to the taxpayer” is defined under
section 267(b). For section 4979A excise taxes, the amount entered on
Part I, line 6, is 50% of the amount involved in the prohibited
The nonallocation period is the period beginning on the
allocations described in items 1 through 4, earlier, under
date the qualified securities are sold and ending on the later
Line 6.
of:
• 10 years after the date of sale, or Line 10a. Under section 4971(g)(2), each employer who
• The date on which the final payment is made if acquisition contributes to a multiemployer plan and fails to comply with a
indebtedness was incurred at the time of sale. funding improvement or rehabilitation plan will be liable for an
The employer sponsoring the plan or the eligible excise tax for each failure to make a required contribution
worker-owned cooperative is responsible for paying the tax. within the time frame under such plan. Enter the amount of
each contribution the employer failed to make in a timely
For purposes of items 3 and 4, under Line 6, earlier, the manner.
excise tax on these transactions under section 4979A is 50%
of the amount involved. The amount involved includes the A “funding improvement plan” is a plan which consists of
following. the actions, including options or a range of options to be
proposed to the bargaining parties, formulated to provide,
1. The value of any synthetic equity owned by a based on reasonably anticipated experience and reasonable
disqualified person in any nonallocation year. “Synthetic actuarial assumptions, for the attainment of the following
equity” means any stock option, warrant, restricted stock, requirements by the plan during the funding improvement
deferred issuance stock right, or similar interest or right that period.
gives the holder the right to acquire or receive stock of the S
corporation in the future. Synthetic equity may also include a 1. The plan's funded percentage as of the close of the
stock appreciation right, phantom stock unit, or similar right to funding improvement period equals or exceeds a percentage
a future cash payment based on the value of the stock or equal to the sum of:
appreciation; and nonqualified deferred compensation as a. The percentage as of the beginning of the funding
described in Regulations section 1.409(p)-1(f)(2)(iv). The improvement period, plus
value of a synthetic equity is the value of the shares on which b. 33% of the difference between 100% and the
the synthetic equity is based or the present value of the percentage as of the beginning of the funding improvement
nonqualified deferred compensation. period (or 20% of the difference if the plan is in seriously
2. The value of any S corporation shares in an ESOP endangered status).
accruing during a nonallocation year or allocated directly or 2. No accumulated funding deficiency for any plan year
indirectly under the ESOP or any other plan of the employer during the funding improvement period, taking into account
qualified under section 401(a) for the benefit of a disqualified any extension of the amortization period under
person. For additional information, see Regulations section 431(d).
section 1.409(p)-1(b)(2).
3. The total value of all deemed-owned shares of all A “rehabilitation plan” is a plan which consists of actions,
disqualified persons. including options or a range of options to be proposed to the

Instructions for Form 5330 -5-

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bargaining parties, formulated to enable the plan to cease to File at the address shown under Where To File, earlier.
be in critical status by the end of the rehabilitation period.
All or part of this excise tax may be waived under Schedule A. Tax on Nondeductible
section 4971(g)(5). Employer Contributions to Qualified
Line 16. If a tax-exempt entity manager approves or Employer Plans (Section 4972)
otherwise causes the entity to be a party to a prohibited tax
shelter transaction during the year and knows or has reason Section 4972. Section 4972 imposes an excise tax on
to know that the transaction is a prohibited tax shelter employers who make nondeductible contributions to their
transaction, the entity manager must pay an excise tax under qualified plans. The excise tax is equal to 10% of the
section 4965(b)(2). nondeductible contributions in the plan as of the end of the
For purposes of section 4965, plan entities are: employer's tax year.
• Qualified pension, profit-sharing, and stock bonus plans A “qualified employer plan” for purposes of this section
described in section 401(a); means any plan qualified under section 401(a), any annuity
• Annuity plans described in section 403(a); plan qualified under section 403(a), and any simplified
• Annuity contracts described in section 403(b); employee pension plan qualified under section 408(k) or any
• Qualified tuition programs described in section 529; simple retirement account under section 408(p). The term
• Retirement plans maintained by a governmental employer qualified plan does not include certain governmental plans
described in section 457(b); and certain plans maintained by tax-exempt organizations.
• Individual retirement accounts within the meaning of For purposes of section 4972, “nondeductible
section 408(a); contributions” for the employer's current tax year are the sum
• Individual retirement annuities within the meaning of of:
section 408(b); 1. The excess (if any) of the employer's contribution for
• Archer medical savings accounts (MSAs) within the the tax year less the amount allowable as a deduction under
meaning of section 220(d); section 404 for that year; and
• Coverdell education savings accounts described in
section 530; and 2. The total amount of the employer's contributions for
• Health savings accounts within the meaning of each preceding tax year that was not allowable as a
section 223(d). deduction under section 404 for such preceding year,
reduced by the sum of:
An entity manager is the person who approves or
otherwise causes the entity to be a party to a prohibited tax a. The portion of that amount available for return under
shelter transaction. the applicable qualification rules and actually returned to the
employer prior to the close of the current tax year; and
The excise tax under section 4965(a)(2) is $20,000 for
each approval or other act causing the organization to be a b. The portion of such amount that became deductible for
party to a prohibited tax shelter transaction. a preceding tax year or for the current tax year.
A “prohibited tax shelter transaction” is any listed Although pre-1987 nondeductible contributions are not
transaction and any prohibited reportable transaction, as subject to this excise tax, they are taken into account to
defined, later. determine the extent to which post-1986 contributions are
1. A “listed transaction” is a reportable transaction that is deductible. See section 4972 and Pub. 560, Retirement
the same as, or substantially similar to, a transaction Plans for Small Business, for details.
specifically identified by the Secretary of the Treasury as a Defined benefit plans exception. For purposes of
tax avoidance transaction for purposes of section 6011. determining the amount of nondeductible contributions
subject to the 10% excise tax, the employer may elect not to
2. A “prohibited reportable transaction” is:
include any contributions to a defined benefit plan except, in
a. Any confidential transaction within the meaning of the case of a multiemployer plan, to the extent those
Regulations section 1.6011-4(b)(3), or contributions exceed the full-funding limitation (as defined in
b. Any transaction with contractual protection within the section 431(c)(6)). This election applies to terminated and
meaning of Regulations section 1.6011-4(b)(4). ongoing plans. An employer making this election cannot also
benefit from the exceptions for terminating plans and for
Part II. Tax Due certain contributions to defined contribution plans under
section 4972(c)(6). When determining the amount of
If you are filing an amended Form 5330 and you paid nondeductible contributions, the deductible limits under
taxes with your original return and those taxes have section 404(a)(7) must be applied first to contributions to
the same due date as those previously reported, defined contribution plans and then to contributions to
check the box in item H and enter the tax reported on your defined benefit plans.
original return in the entry space for line 18. If you file Form Defined contribution plans exception. In determining
5330 for a claim for refund or credit, show the amount of the amount of nondeductible contributions subject to the 10%
overreported tax in parentheses on line 19. Otherwise, show excise tax, do not include any of the following.
the amount of additional tax due on line 19 and include the Employer contributions to one or more defined contribution
•
payment with the amended Form 5330. plans that are nondeductible solely because of
section 404(a)(7) that do not exceed the matching
Lines 17 through 19. If you file Form 5330 on paper, make
contributions described in section 401(m)(4)(A).
your check or money order payable to the “United States
Treasury” for the full amount due. Attach the payment to your • Contributions to a SIMPLE 401(k) or a SIMPLE IRA
considered nondeductible because they are not made in
return. Write your name, identifying number, plan number,
connection with the employer's trade or business. However,
and “Form 5330, Section ____” on your payment.

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this provision pertaining to SIMPLEs does not apply to             Note. For purposes of section 4975, the term “plan” does not 
contributions made on behalf of the employer or the                include a section 403(b) tax-sheltered annuity plan. See 
employer's family.                                                 section 4975(e).
  For purposes of this exception, the combined plan                        If the IRS determined at any time that your plan was 
deduction limits are first applied to contributions to the         !       a plan as defined above, it will always remain subject 
defined benefit plan and then to the defined contribution plan.    CAUTION to the excise tax on prohibited transactions under 
  Restorative payments to a defined contribution plan are          section 4975. This also applies to the tax on minimum 
not considered nondeductible contributions if the payments         funding deficiencies under section 4971.
are made to restore some or all of the plan's losses due to an     Disqualified person.     A “disqualified person” is a person 
action (or a failure to act) that creates a reasonable risk of     who is any of the following.
liability for breach of fiduciary duty. Amounts paid in excess 
of the loss are not considered restorative payments.               1. A fiduciary.
  For these purposes, multiemployer plans are not taken            2. A person providing services to the plan.
into consideration in applying the overall limit on deductions     3. An employer, any of whose employees are covered by 
where there is a combination of defined benefit and defined        the plan.
contribution plans.                                                4. An employee organization, any of whose members are 
                                                                   covered by the plan.
Schedule B. Tax on Excess 
                                                                   5. A direct or indirect owner of 50% or more of:
Contributions to Section 403(b)(7)(A)                              a. The combined voting power of all classes of stock 
Custodial Accounts                                                 entitled to vote, or the total value of shares of all classes of 
                                                                   stock of a corporation;
(Section 4973(a)(3))
                                                                   b. The capital interest or the profits interest of a 
Section 4973(a) imposes a 6% excise tax on excess                  partnership; or
contributions to section 403(b)(7)(A) custodial accounts at 
the close of the tax year. The tax is paid by the individual       c. The beneficial interest of a trust or unincorporated 
account holder.                                                    enterprise in (a), (b), or (c), which is an employer or an 
                                                                   employee organization described in (3) or (4) above. A 
Line 1. Enter total current year contributions, less any           limited liability company should be treated as a corporation or 
rollover contributions described in section 403(b)(8) or           a partnership, depending on how the organization is treated 
408(d)(3)(A).                                                      for federal tax purposes.
Line 2. Enter the amount excludable under section 415(c)           6. A member of the family of any individual described in 
(limit on annual additions).                                       (1), (2), (3), or (5). A “member of a family” is the spouse, 
                                                                   ancestor, lineal descendant, and any spouse of a lineal 
        To determine the amount excludable for a specific          descendant.
TIP     year, see Pub. 571, Tax-Sheltered Annuity Plans 
        (403(b) Plans), for that year.                             7. A corporation, partnership, or trust or estate of which 
                                                                   (or in which) any direct or indirect owner holds 50% or more 
  The limit on annual additions under section 415(c)(1)(A) is      of the interest described in (5a), (5b), or (5c) of such entity. 
subject to cost-of-living adjustments as described in              For this purpose, the beneficial interest of the trust or estate 
section 415(d). The dollar limit for a calendar year, as           is owned, directly or indirectly, or held by persons described 
adjusted annually, is published during the fourth quarter of       in (1) through (5).
the prior calendar year in the Internal Revenue Bulletin.          8. An officer, director (or an individual having powers or 
                                                                   responsibilities similar to those of officers or directors), a 
Schedule C. Tax on Prohibited                                      10% or more shareholder or highly compensated employee 
Transactions (Section 4975)                                        (earning 10% or more of the yearly wages of an employer) of 
                                                                   a person described in (3), (4), (5), or (7).
Section 4975.   Section 4975 imposes an excise tax on a            9. A 10% or more (in capital or profits) partner or joint 
disqualified person who engages in a prohibited transaction        venturer of a person described in (3), (4), (5), or (7).
with the plan.
                                                                   10. Any disqualified person, as described in (1) through 
  Plan. For purposes of this section, the term “plan” means 
                                                                   (9) above, who is a disqualified person with respect to any 
any of the following.
                                                                   plan to which a section 501(c)(22) trust applies, that is 
• A trust described in section 401(a) that forms part of a 
                                                                   permitted to make payments under section 4223 of the 
plan.
                                                                   Employee Retirement Income Security Act (ERISA).
• A plan described in section 403(a) that is exempt from tax 
under section 501(a).                                              Prohibited transaction.     A “prohibited transaction” is any 
• An individual retirement account described in                    direct or indirect:
section 408(a).                                                    1. Sale or exchange, or leasing of any property between 
• An individual retirement annuity described in                    a plan and a disqualified person; or a transfer of real or 
section 408(b).                                                    personal property by a disqualified person to a plan where 
• An Archer MSA described in section 220(d).                       the property is subject to a mortgage or similar lien placed on 
• A Coverdell education savings account described in               the property by the disqualified person within 10 years prior 
section 530.                                                       to the transfer, or the property transferred is subject to a 
• A Health Savings Account described in section 223(d).            mortgage or similar lien which the plan assumes;
• A trust described in section 501(c)(22).
                                                                   2. Lending of money or other extension of credit between 
                                                                   a plan and a disqualified person;

Instructions for Form 5330                                      -7-

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3. Furnishing of goods, services, or facilities between a Temporary Regulations section 141.4975-13 states
plan and a disqualified person; ! that, until final regulations are written under section
4. Transfer to, or use by or for the benefit of, a CAUTION 4975(f), the definitions of amount involved and
disqualified person of income or assets of a plan; correction found in Regulations section 53.4941(e)-1 will
apply.
5. Act by a disqualified person who is a fiduciary dealing
with the income or assets of a plan in the disqualified Failure to transmit participant contributions. For
person’s own interest or account; or purposes of calculating the excise tax on a prohibited
6. Receipt of any consideration for a disqualified person’s transaction where there is a failure to transmit participant
own personal account by any disqualified person who is a contributions (elective deferrals) or amounts that would have
fiduciary from any party dealing with the plan connected with otherwise been payable to the participant in cash, the
a transaction involving the income or assets of the plan. amount involved is based on interest on those elective
deferrals. See Rev. Rul. 2006-38.
Exemptions. See sections 4975(d), 4975(f)(6)(B)(ii), and Column (e). The initial tax on a prohibited transaction is
4975(f)(6)(B)(iii) for specific exemptions to prohibited 15% of the amount involved in each prohibited transaction for
transactions. Also, see section 4975(c)(2) for certain other each year or part of a year in the taxable period. Multiply the
transactions or classes of transactions that may become amount in column (d) by 15%.
exempt.
Example. The example of a prohibited transaction below
Line 1. Check the box that best characterizes the prohibited does not cover all types of prohibited transactions. For more
transaction for which an excise tax is being paid. A prohibited examples, see Regulations section 53.4941(e)-1(b)(4).
transaction is discrete unless it is of an ongoing nature. A disqualified person borrows money from a plan in a
Transactions involving the use of money (loans, etc.) or other prohibited transaction under section 4975. The FMV of the
property (rent, etc.) are of an ongoing nature and will be use of the money and the actual interest on the loan is
treated as a new prohibited transaction on the first day of $1,000 per month (the actual interest is paid in this example).
each succeeding tax year or part of a tax year that is within The loan was made on July 1, 2021 (date of transaction), and
the taxable period. repaid on December 31, 2022 (date of correction). The
Line 2, column (b). List the date of all prohibited disqualified person's tax year is the calendar year. On July
transactions that took place in connection with a particular 31, 2023, the disqualified person files a delinquent Form
plan during the current tax year. Also, list the date of all 5330 for the 2021 plan year (which in this case is the
prohibited transactions that took place in prior years unless calendar year) and a timely Form 5330 for the 2022 plan year
either the transaction was corrected in a prior tax year or the (which in this case is the calendar year). No notice of
section 4975(a) tax was assessed in the prior tax year. A deficiency with respect to the tax imposed by section 4975(a)
disqualified person who engages in a prohibited transaction has been mailed to the disqualified person and no
must file a separate Form 5330 to report the excise tax due assessment of such excise tax has been made by the IRS
under section 4975 for each tax year. before the time the disqualified person filed the Forms 5330.
Line 2, columns (d) and (e). The “amount involved in a Each prohibited transaction has its own separate taxable
prohibited transaction” means the greater of the amount of period that begins on the date the prohibited transaction
money and the fair market value (FMV) of the other property occurred or is deemed to occur and ends on the date of the
given, or the amount of money and the FMV of the other correction. The taxable period that begins on the date the
property received. However, for services described in loan occurs runs from July 1, 2021 (date of loan), through
sections 4975(d)(2) and (10), the amount involved only December 31, 2022 (date of correction). When a loan is a
applies to excess compensation. For purposes of prohibited transaction, the loan is treated as giving rise to a
section 4975(a), FMV must be determined as of the date on prohibited transaction on the date the transaction occurs, and
which the prohibited transaction occurs. If the use of money an additional prohibited transaction on the first day of each
or other property is involved, the amount involved is the succeeding tax year (or portion of a tax year) within the
greater of the amount paid for the use or the FMV of the use taxable period that begins on the date the loan occurs.
for the period for which the money or other property is used. Therefore, in this example, there are two prohibited
In addition, transactions involving the use of money or other transactions, the first occurring on July 1, 2021, and ending
property will be treated as giving rise to a prohibited on December 31, 2021, and the second occurring on
transaction occurring on the date of the actual transaction, January 1, 2022, and ending on December 31, 2022.
plus a new prohibited transaction on the first day of each Section 4975(a) imposes a 15% excise tax on the amount
succeeding tax year or portion of a succeeding tax year involved for each tax year or part thereof in the taxable period
which is within the taxable period. The “taxable period” for of each prohibited transaction.
this purpose is the period of time beginning with the date of The Form 5330 for the year ending December 31,
the prohibited transaction and ending with the earliest of: 2021. The amount involved to be reported in the Form 5330,
1. The date the correction is completed, Schedule C, line 2, column (d), for the 2021 plan year, is
2. The date of the mailing of a notice of deficiency, or $6,000 (6 months x $1,000). The tax due is $900 ($6,000 x
15%). (See Figure 1, later.) (Any interest and penalties
3. The date on which the tax under section 4975(a) is
imposed for the delinquent filing of Form 5330 and the
assessed.
delinquent payment of the excise tax for 2021 will be billed
See the instructions for Schedule C, under Additional tax for separately to the disqualified person.)
failure to correct the prohibited transaction (section 4975(b)),
The Form 5330 for the year ending December 31,
for the definition of “correction.”
2022. The excise tax to be reported on the 2022 Form 5330
would include both the prohibited transaction of July 1, 2021,
with an amount involved of $6,000, resulting in a tax due of

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Figure 1. Example for the Calendar 2021 Plan Year Used When Filing for the 2021 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) 7-1-21 Loan $6,000 $900
(ii)
(iii)
3 Add amounts in column (e). Enter here and on Part I, line 3a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ▶ $900

Figure 2. 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) 7-1-21 Loan $6,000 $900
(ii) 1-1-22 Loan $12,000 $1,800
(iii)
3 Add amounts in column (e). Enter here and on Part I, line 3a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ▶ $2,700

$900 ($6,000 x 15%), and the second prohibited transaction If the prohibited transaction is not corrected within the
of January 1, 2022, with an amount involved of $12,000 (12 taxable period, an additional tax equal to 100% of the amount
months x $1,000), resulting in a tax due of $1,800 ($12,000 x involved will be imposed under section 4975(b). Any
15%). (See Figure 2, above.) The taxable period for the disqualified person who participated in the prohibited
second prohibited transaction runs from January 1, 2022, transaction (other than a fiduciary acting only as such) must
through December 31, 2022 (date of correction). Because pay this tax imposed by section 4975(b). Report the
there are two prohibited transactions with taxable periods additional tax on Part I, Section A, line 3b.
running during 2022, the section 4975(a) tax is due for the
Line 4. Check “No” if there has not been a correction of all of
2022 tax year for both prohibited transactions.
the prohibited transactions by the end of the tax year for
When a loan from a qualified plan that is a prohibited which this Form 5330 is being filed. Attach a statement
TIP transaction spans successive tax years, constituting including item number from line 2a and description indicating
multiple prohibited transactions, and during those when the correction will be made.
years the first tier prohibited transaction excise tax rate
Line 5. If more than one disqualified person participated in
changes, the first tier excise tax liability for each prohibited
the same prohibited transaction, list on this schedule the
transaction is the sum of the products resulting from
name, address, and SSN or EIN of each disqualified person,
multiplying the amount involved for each year in the taxable
other than the disqualified person who files this return.
period for that prohibited transaction by the excise tax rate in
effect at the beginning of that taxable period. For more For all transactions, complete columns (a), (b), and (c). If
information, see Rev. Rul. 2002-43, 2002-32 I.R.B. 85 at the transaction has been corrected, complete columns (a)
www.irs.gov/pub/irs-irbs/irb02-28.pdf. Unlike the previous through (e). If additional space is needed, you may attach a
example, the example in Rev. Rul. 2002-43 contains unpaid statement fully explaining the correction and identifying
interest. persons involved in the prohibited transaction.
Additional tax for failure to correct the prohibited Prohibited transactions and investment advice. The
transaction (section 4975(b)). To avoid liability for prohibited transaction rules of section 4975(c) will not apply
additional taxes and penalties, and in some cases further to any transaction in connection with investment advice if the
initial taxes, a correction must be made within the taxable investment advice provided by a fiduciary adviser is provided
period. The term “correction” is defined as undoing the under an eligible investment advice arrangement.
prohibited transaction to the extent possible, but in any case For this purpose, an “eligible investment advice
placing the plan in a financial position not worse than that in arrangement” is an arrangement that either:
which it would be if the disqualified person were acting under • Provides that any fees, including any commission or other
the highest fiduciary standards. compensation, received by the fiduciary adviser for

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investment advice or with respect to the sale, holding, or corporations under section 414(b), a group of trades or
acquisition of any security or other property for the businesses under common control under section 414(c), an
investment of plan assets do not vary depending on the basis affiliated service group under section 414(m), and any other
of any investment option selected; or group treated as a single employer under section 414(o).
• Uses a computer model under an investment advice
If the IRS determined at any time that your plan was
program, described in section 4975(f)(8)(C), in connection
a plan as defined on Schedule C, it will always
with investment advice provided by a fiduciary adviser to a CAUTION!
remain subject to the excise tax on failure to meet
participant or beneficiary.
minimum funding standards.
Additionally, the eligible investment advice arrangement
must meet the provisions of sections 4975(f)(8)(D), (E), (F), Line 1. Enter the amount (if any) of the aggregate unpaid
(G), (H), and (I). minimum required contributions (or in the case of a
For purposes of the statutory exemption on investment multiemployer plan, an accumulated funding deficiency as
advice, a “fiduciary adviser” is defined in defined in section 431(a) (or section 418B if a multiemployer
section 4975(f)(8)(J). plan in reorganization)).
Correcting certain prohibited transactions. Generally,
Line 2. Multiply line 1 by the applicable tax rate shown
if a disqualified person enters into a direct or indirect
below and enter the result.
prohibited transaction, listed in (1) through (4) below, in
connection with the acquisition, holding, or disposition of • 10% for plans other than multiemployer plans.
certain securities or commodities, and the transaction is • 5% for all multiemployer plans.
corrected within the correction period, it will not be treated as Additional tax for failure to correct. For
a prohibited transaction and no tax will be assessed. single-employer plans, when an initial tax is imposed under
section 4971(a) on any unpaid minimum required
1. Sale or exchange, or leasing of any property between contribution and the unpaid minimum required contribution
a plan and a disqualified person. remains unpaid as of the close of the taxable period, an
2. Lending of money or other extension of credit between additional tax of 100% of the amount that remains unpaid is
a plan and a disqualified person. imposed under section 4971(b).
3. Furnishing of goods, services, or facilities between a For multiemployer plans, when an initial tax is imposed
plan and a disqualified person. under section 4971(a)(2) on an accumulated funding
4. Transfer to, or use by or for the benefit of, a deficiency and the accumulated funding deficiency is not
disqualified person of income or assets of a plan. corrected within the taxable period, an additional tax equal to
100% of the accumulated funding deficiency, to the extent
However, if, at the time the transaction was entered into, not corrected, is imposed under section 4971(b).
the disqualified person knew or had reason to know that the For this purpose, the “taxable period” is the period
transaction was prohibited, the transaction would be subject beginning with the end of the plan year where there is an
to the tax on prohibited transactions. unpaid minimum required contribution or an accumulated
For purposes of section 4975(d)(23), the term “correct” funding deficiency and ending on the earlier of:
means to: • The date the notice of deficiency for the section 4971(a)
• Undo the transaction to the extent possible and in all excise tax is mailed, or
cases to make good to the plan or affected account any • The date the section 4971(a) excise tax is assessed.
losses resulting from the transaction, and Report the tax for failure to correct the unpaid minimum
• Restore to the plan or affected account any profits made required contribution or the accumulated funding deficiency
through the use of assets of the plan. on Part I, Section B, line 8b.
The “correction period” is the 14-day period beginning on
the date on which the disqualified person discovers or Schedule E. Tax on Failure To Pay
reasonably should have discovered that the transaction
constitutes a prohibited transaction. Liquidity Shortfall (Section 4971(f)(1))
If your plan has a liquidity shortfall for which an excise tax
Schedule D. Tax on Failure To Meet under section 4971(f)(1) is imposed for any quarter of the
plan year, complete lines 1 through 4.
Minimum Funding Standards
Line 1. Enter the amount of the liquidity shortfall(s) for each
(Section 4971(a)) quarter of the plan year.
In the case of a single-employer plan, section 4971(a)
Line 2. Enter the amount of any contributions made to the
imposes a 10% tax on the aggregate unpaid minimum
plan by the due date of the required quarterly installment(s)
required contributions for all plan years remaining unpaid as
that partially corrected the liquidity shortfall(s) reported on
of the end of any plan year. In the case of a multiemployer
line 1.
plan, section 4971(a) imposes a 5% tax on the amount of the
accumulated funding deficiency determined as of the end of Line 3. Enter the net amount of the liquidity shortfall.
the plan year. (Subtract line 2 from line 1.)
If a plan fails to meet the funding requirements under Additional tax for failure to correct liquidity shortfall.
section 412, the employer and all controlled group members If the plan has a liquidity shortfall as of the close of any
will be subject to excise taxes under sections 4971(a) and quarter and as of the close of the following 4 quarters, an
(b). additional tax will be imposed under section 4971(f)(2) equal
to the amount on which tax was imposed by
Except in the case of a multiemployer plan, all members of section 4971(f)(1) for such quarter. Report the additional tax
a controlled group are jointly and severally liable for this tax. on Part I, Section B, line 9b.
A “controlled group” in this case means a controlled group of

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                                                                       the 240-day period following the required date for the 
Schedule F. Tax on Multiemployer 
                                                                       actuarial certification of critical status in section 432(b)(3)(A).
Plans in Endangered or Critical                                        Liability for this tax is imposed on each plan sponsor. This 
Status (Sections                                                       excise tax may not be waived.
                                                                               Follow the instructions as defined above for counting 
4971(g)(3) and 4971(g)(4))
                                                                               days and completing line 2b.
For years beginning after 2007, section 4971(g) imposes an             CAUTION!
excise tax on employers who contribute to multiemployer 
plans for failure to comply with a funding improvement or              Complete line 2b as instructed below. Enter the number of 
rehabilitation plan, failure to meet requirements for plans in         days during the tax year which are included in the period 
endangered or critical status, or failure to adopt a                   beginning on the first day following the close of the 240-day 
rehabilitation plan. See the instructions for line 10a, earlier.       period and ending on the day the rehabilitation plan is 
                                                                       adopted.
Line 1. Under section 4971(g)(3), a multiemployer plan that 
is in seriously endangered status when it fails to meet its            Schedule G. Tax on Excess Fringe 
applicable benchmarks by the end of the funding 
improvement period will be treated as having an                        Benefits (Section 4977)
accumulated funding deficiency for the last plan year in such          If you made an election to be taxed under section 4977 to 
period and each succeeding year until the funding                      continue your nontaxable fringe benefit policy that was in 
benchmarks are met.                                                    existence on or after January 1, 1984, check “Yes” on line 1 
  Similarly, a plan that is in critical status and either fails to     and complete lines 2 through 4.
meet the requirements of section 432 by the end of the                 Line 3. Excess fringe benefits are calculated by subtracting 
rehabilitation period, or has received certification under             1% of the aggregate compensation paid by you to your 
section 432(b)(3)(A)(ii) for 3 consecutive plan years that the         employees during the calendar year that was includible in 
plan is not making the scheduled progress in meeting its               their gross income from the aggregate value of the 
requirements under the rehabilitation plan, will be treated as         nontaxable fringe benefits under sections 132(a)(1) and (2).
having an accumulated funding deficiency for the last plan 
year in such period and each succeeding plan year until the            Schedule H. Tax on Excess 
funding requirements are met.
  In both cases, the accumulated funding deficiency is an              Contributions to Certain Plans 
amount equal to the greater of the amount of the                       (Section 4979)
contributions necessary to meet the benchmarks or                      Any employer who maintains a plan described in section 
requirements, or the amount of the accumulated funding                 401(a), 403(a), 403(b), 408(k), or 501(c)(18) may be subject 
deficiency without regard to this rule. The existence of an            to an excise tax on excess aggregate contributions made on 
accumulated funding deficiency triggers the initial 5% excise          behalf of highly compensated employees. The employer may 
tax under section 4971(a).                                             also be subject to an excise tax on excess contributions to a 
  A plan is in “endangered status” if either of the following          cash or deferred arrangement connected with the plan.
occurs.
• The plan's actuary timely certifies that the plan is not in          The tax is on the excess contributions and the excess 
critical status for that plan year and at the beginning of that        aggregate contributions made to or on behalf of the highly 
plan year the plan's funded percentage for the plan year is            compensated employees as defined in section 414(q).
less than 80%.                                                         Generally, a “highly compensated employee” is an 
• The plan has an accumulated funding deficiency for the               employee who:
plan year or is projected to have such an accumulated 
funding deficiency for any of the 6 succeeding plan years,             1. Was a 5% owner at any time during the year or the 
taking into account any extension of amortization periods              preceding year; or
under section 431(d).                                                  2. For the preceding year, had compensation from the 
  A plan is in “critical status” if it is determined by the            employer in excess of a dollar amount for the year ($135,000 
multiemployer plan's actuary that one of the four formulas in          for 2022) and, if the employer so elects, was in the top-paid 
section 432(b)(2) is met for the applicable plan year.                 group for the preceding year.
  All or part of this excise tax may be waived due to                  An employee is in the “top-paid group” for any year if the 
reasonable cause.                                                      employee is in the group consisting of the top 20% of 
                                                                       employees when ranked on the basis of compensation paid. 
Line 2. Under section 4971(g)(4), the plan sponsor of a                An employee (who is not a 5% owner) who has 
multiemployer plan in critical status, as defined above, will be       compensation in excess of $135,000 is not a highly 
liable for an excise tax for failure to adopt a rehabilitation plan    compensated employee if the employer elects the top-paid 
within the time prescribed under section 432. The tax is equal         group limitation and the employee is not a member of the 
to the greater of:                                                     top-paid group.
• The amount of tax imposed under section 4971(a)(2); or
• An amount equal to $1,100, multiplied by the number of               The excess contributions subject to the section 4979 
days in the tax year which are included in the period that             excise tax are equal to the amount by which employer 
begins on the first day following the close of the 240-day             contributions actually paid over to the trust exceed the 
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.

Instructions for Form 5330                                         -11-

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The excess aggregate contributions subject to the section rate of future benefit accrual or the elimination or significant
4979 excise tax are equal to the amount by which the reduction of an early retirement benefit or retirement-type
aggregate matching contributions of the employer and the subsidy. The tax is $100 per day per each applicable
employee contributions (and any qualified nonelective individual and each employee organization representing
contribution or elective contribution taken into account in participants who are applicable individuals for each day of
computing the contribution percentage under section the noncompliance period. This notice is called a “section
401(m)) actually made on behalf of the highly compensated 204(h) notice” because section 204(h) of ERISA has parallel
employees for each plan year exceed the maximum amount notice requirements.
of contributions permitted in the contribution percentage An “applicable individual” is a participant in the plan, or an
computation under section alternate payee of a participant under a qualified domestic
401(m)(2)(A). relations order, whose rate of future benefit accrual (or early
However, there is no excise tax liability if the excess retirement benefit or retirement-type subsidy) under the plan
contributions or the excess aggregate contributions and any may reasonably be expected to be significantly reduced by a
income earned on the contributions are distributed (or, if plan amendment. (For plan years beginning after December
forfeitable, forfeited) to the participants for whom the excess 31, 2007, the requirement to give 204(h) notice was
contributions were made within 2 / months after the end of 1 2 extended to an employer who has an obligation to contribute
the plan year. to a multiemployer plan.)
Whether a participant, alternate payee, or an employer (as
Schedule I. Tax on Reversion of described in the above paragraph) is an applicable individual
Qualified Plan Assets to an Employer is determined on a typical business day that is reasonably
approximate to the time the section 204(h) notice is provided
(Section 4980) (or on the latest date for providing section 204(h) notice, if
Section 4980 imposes an excise tax on an employer earlier), based on all relevant facts and circumstances. For
reversion of qualified plan assets to an employer. Generally, more information in determining whether an individual is a
the tax is 20% of the amount of the employer reversion. The participant or alternate payee, see Regulations
excise tax rate increases to 50% if the employer does not section 54.4980F-1, Q&A 10.
establish or maintain a qualified replacement plan following The “noncompliance period” is the period beginning on
the plan termination or provide certain pro-rata benefit the date the failure first occurs and ending on the date the
increases in connection with the plan termination. See notice of failure is provided or the failure is corrected.
section 4980(d)(1)(A) or (B) for more information. Exceptions. The section 4980F excise tax will not be
An “employer reversion” is the amount of cash and the imposed for a failure during any period in which the following
FMV of property received, directly or indirectly, by an occurs.
employer from a qualified plan. For exceptions to this 1. Any person subject to liability for the tax did not know
definition, see section 4980(c)(2)(B) and section 4980(c)(3). that the failure existed and exercised reasonable diligence to
A “qualified plan” is: meet the notice requirement. A person is considered to have
• Any plan meeting the requirements of section 401(a) or exercised reasonable diligence but did not know the failure
403(a), other than a plan maintained by an employer if that existed only if:
employer has at all times been exempt from federal income a. The responsible person exercised reasonable
tax; or diligence in attempting to deliver section 204(h) notice to
• A governmental plan within the meaning of section 414(d). applicable individuals by the latest date permitted; or
Terminated defined benefit plan. If a defined benefit b. At the latest date permitted for delivery of section
plan is terminated, and an amount in excess of 25% of the 204(h) notice, the person reasonably believed that section
maximum amount otherwise available for reversion is 204(h) notice was actually delivered to each applicable
transferred from the terminating defined benefit plan to a individual by that date.
defined contribution plan, the amount transferred is not 2. Any person subject to liability for the tax exercised
treated as an employer reversion for purposes of reasonable diligence to meet the notice requirement and
section 4980. However, the amount the employer receives is corrects the failure within 30 days after the employer (or other
subject to the 20% excise tax. For additional information, see person responsible for the tax) knew, or exercising
Rev. Rul. 2003-85, 2003-32 I.R.B. 291 at www.irs.gov/irb/ reasonable diligence would have known, that the failure
2003-32_IRB/ar11.html. existed.
Lines 1 through 4. Enter the date of reversion on line 1. Generally, section 204(h) notice must be provided at least
Enter the reversion amount on line 2a and the applicable 45 days before the effective date of the section 204(h)
excise tax rate on line 2b. If you use a tax percentage other amendment. For exceptions to this rule, see Regulations
than 50% on line 2b, explain on line 4 why you qualify to use section 54.4980F-1, Q&A 9.
a rate other than 50%.
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
excise tax imposed during a tax year of the employer will not
Notice of Significant Reduction in 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
the Treasury is authorized to waive the excise tax to the
Section 204(h) notice. Section 4980F imposes an excise extent that the payment of the tax would be excessive
tax on an employer (or, in the case of a multiemployer plan, relative to the failure involved. See Rev. Proc. 2013-4,
the plan) for failure to give section 204(h) notice of plan 2013-1 I.R.B. 123, as revised by subsequent documents,
amendments that provide for a significant reduction in the

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available at www.irs.gov/irb/2013-01_IRB/ar09.html, for percentage means the ratio that the value of plan assets
procedures to follow in applying for a waiver of part or all of bears to the plan's funding liability.
the excise tax due to reasonable cause.
Line 1. Under section 4971(h)(2), the excise tax amount
Line 4. A failure occurs on any day that any applicable with respect to any CSEC plan sponsor for any tax year
individual (AI) is not provided section 204(h) notice. should be the amount equal to $100 multiplied by the number
Example. There are 1,000 AIs. The plan administrator of days during the tax year that are included in the period
fails to give section 204(h) notice to 100 AIs for 60 days, and beginning on the day following the close of the 180-day
to 50 of those AIs for an additional 30 days. In this case, period described in section 433(j)(3) and ending on the day
there are 7,500 failures ((100 AIs x 60 days) + (50 AIs x 30 on which the funding restoration plan is adopted.
days) = 7,500). Line 2. Calculate the excise tax amount by multiplying days
entered on line 1 by $100. Enter the excise tax amount on
Schedule K. Tax on Prohibited Tax line 2 and on Part I, line 10d.
Shelter Transactions (Section 4965) All or part of this excise tax may be waived if the IRS
Section 4965 provides that an entity manager of a determines that a failure is due to reasonable cause and not
tax-exempt organization may be subject to an excise tax on to willful neglect.
prohibited tax shelter transactions under section 4965. In the
case of a plan entity, an entity manager is any person who Privacy Act and Paperwork Reduction Act Notice. We
approves or otherwise causes the tax-exempt entity to be a ask for the information on this form to carry out the Internal
party to a prohibited tax shelter transaction. The excise tax is Revenue laws of the United States. This form is required to
$20,000 and is assessed for each approval or other act be filed under sections 4965, 4971, 4972, 4973, 4975, 4976,
causing the organization to be a party to the prohibited tax 4977, 4978, 4979, 4979A, 4980, and 4980F of the Internal
shelter transaction. Revenue Code. Section 6109 requires you to provide your
identifying number. If you fail to provide this information in a
Schedule L. Tax on Failure of a timely manner, you may be liable for penalties and interest.
Cooperative and Small Employer Routine uses of this information include giving it to the
Department of Justice for civil and criminal litigation, and to
Charity Plan Sponsor To Adopt cities, states, and the District of Columbia for use in
administering their tax laws. We may also disclose this
Funding Restoration Plan information to federal and state or local agencies to enforce
(Section 4971(h)) federal nontax criminal laws and to combat terrorism.
A cooperative and small employer charity (CSEC) plan is: You are not required to provide the information requested
• a defined benefit plan (other than a multiemployer plan) on a form that is subject to the Paperwork Reduction Act
including an eligible cooperative plan (as defined in section unless the form displays a valid OMB control number. Books
104 of the PPA ‘06); or records relating to a form or its instructions must be
• a plan that, as of June 25, 2010, was maintained by more retained as long as their contents may become material in
than one section 501(c)(3) organization; the administration of any Internal Revenue law. Generally,
• a plan that, as of June 25, 2010, was maintained by a tax returns and return information are confidential, as
single employer that was a 501(c)(3) organization chartered required by section 6103.
under Part B, Subtitle II, Title 36 of the U.S.C., whose primary
exempt purpose is to provide services with respect to The time needed to complete and file this form will vary
children, and which has employees in at least 40 states; or depending on individual circumstances. The estimated
• any plan that, as of January 1, 2000, was maintained by an average time is:
employer that is a 501(c)(3) organization, has been in
existence since at least 1938, conducts medical research Recordkeeping. . . . . . . . . . . 30 hr., 22 min.
directly or indirectly through grant making, and has a primary Learning about the law or
exempt purpose to provide services with respect to mothers the form. . . . . . . . . . . . . . . . 15 hr., 45 min.
and children (section 414(y)(1), amended by section 3609 of
the Coronavirus Aid, Relief, and Economic Security (CARES) Preparing and sending the
Act (P.L. 116-136)). form to the IRS. . . . . . . . . . . 18 hr., 08 min.
Section 433(j)(3) requires a CSEC plan sponsor to
establish a written funding restoration plan within 180 days of
the receipt by the plan sponsor of a certification from the plan If you have comments concerning the accuracy of these
actuary that the plan is in funding restoration status for a plan time estimates or suggestions for making this form simpler,
year. Section 4971(h) imposes an excise tax on the CSEC we would be happy to hear from you. You can send us
plan sponsor for the plan in funding restoration status for the comments from IRS.gov/FormsComments. Or you can write
failure to adopt a funding restoration plan within the time to the Internal Revenue Service, Tax Forms and Publications
prescribed under section 433(j)(3). Division, 1111 Constitution Ave. NW, IR-6526, Washington,
A CSEC plan is treated as being in funding restoration DC 20224. Do not send Form 5330 to this address. Instead,
status for a plan year if the plan's funded percentage as of see Where To File, earlier.
the beginning of such plan year is less than 80%. Funded

Instructions for Form 5330 -13-

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

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