A plan sponsor circling their 401k plan audit deadline on a calendar in red pen


Preparing for your company’s annual 401k audit can be an arduous process. There are many different filing requirements and forms to complete. As a result, it’s easy to get caught up in the paperwork and miss a deadline. However, ignoring your 401k plan audit deadline can be a costly mistake for any business. 


401K Plan Audit Requirements

To comply with the Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Code, employers and plan administrators must hire an outside audit firm for an independent audit of their employee benefit plan. The auditors assist in preparing audited financial statements of the plan that are then attached to Form 5500 and filed with the Internal Revenue Service (IRS). 


When Is Your 401K Plan Audit Deadline?

To protect your business from the penalties for missing a deadline, you need to understand the critical deadlines for benefit plan audits. Form 5500 and audit must be filed on the last day of the 7th month following the end of a plan year to comply with government regulations. For most businesses whose fiscal year is a typical calendar year (ending December 31), the most important deadline is July 31. 


Miss a Deadline? File an Extension

If your deadline is approaching and your audit is not complete, you can request a one-time extension for two and a half months. For businesses whose year ends on December 31, this extension is until October 15. Not sure you can complete your audit in time? Don’t panic. File an extension. 


High Priced Fines For Missed Deadlines

The penalties and fines for missing your 401k plan audit deadline can be extensive. The recent SECURE Act has increased the late filing of Form 5500. The IRS can assess a civil penalty of $250 per day that Form 5500 is late up to $150,000. In addition, the Department of Labor (DOL) can assess a fine of up to $2,233 per day to a business for failing to file Form 5500. Simply put, missing your deadline can be expensive. 


Avoid Costly Mistakes of Missed 401K Plan Audit Deadlines

We know the challenges plan sponsors face, which is why you need a CPA firm you can rely on to complete a low-stress and timely employee benefit plan audit. As a member of the AICPA Employee Benefit Plan Audit Quality Center for CPA firms, we strive for the highest quality standards in employee benefit audits.

Contact us today to help ensure that your company remains compliant and meets all deadlines.