An IRS EP determination letter is a written ruling from the Employee Plans function confirming that a retirement plan’s written terms satisfy the qualification requirements of Internal Revenue Code Section 401(a) and that the related trust is tax-exempt under Section 501(a).1Internal Revenue Service. A Guide to Common Qualified Plan Requirements Sponsors get one by filing Form 5300 or Form 5310 through Pay.gov, paying the user fee, and working with a specialist agent through the document review. Since the IRS narrowed the program in 2017, most sponsors can only apply when the plan is new, when it terminates, or after certain plan mergers.
What the Letter Confirms, and What It Doesn’t
A qualified retirement plan carries three tax advantages: the employer deducts its contributions, the trust’s earnings grow without annual tax, and participants defer income tax on their contributions until distribution.2Office of the Law Revision Counsel. 26 US Code 401 – Qualified Pension, Profit-Sharing, and Stock Bonus Plans Those advantages depend on the plan meeting the qualification rules in both its written document and its day-to-day operation.
A favorable determination letter addresses only the document. The IRS is telling you that the plan’s written terms, as of the letter’s date, pass qualification review. It does not certify how you run the plan. You can hold a valid favorable letter and still be disqualified if you miss annual nondiscrimination testing or apply the wrong vesting schedule to a participant.1Internal Revenue Service. A Guide to Common Qualified Plan Requirements If a plan loses qualified status, the trust owes tax on its earnings, employer contributions become taxable to vested employees, rollovers lose their tax-free treatment, and the employer’s deduction is limited.3eCFR. 26 CFR 1.402(b)-1 – Treatment of Beneficiary of a Trust Not Exempt Under Section 501(a)
When the IRS Will Accept an Application
The threshold question is whether you’re eligible to apply at all. Since January 1, 2017, individually designed plans can only request a determination letter in a handful of situations. Revenue Procedure 2022-40 identifies four:4Internal Revenue Service. Rev. Proc. 2022-40
- Initial qualification of a new individually designed plan that has never received a determination letter, filed on Form 5300.
- Plan termination, filed on Form 5310. The application must go in no later than one year after the termination’s effective date or one year after the termination action is taken, whichever is later, and no later than 12 months after substantially all plan assets have been distributed.
- Merged plans following a corporate transaction between unrelated entities. The plan merger must occur by the end of the first plan year beginning after the plan year that includes the corporate transaction, and the application must be filed by the end of the merged plan’s first plan year after the plan merger date.
- Other limited circumstances that the IRS may open through published guidance. As of 2026, it has not done so.
The old five-year staggered cycle that let ongoing individually designed plans get a fresh letter every few years ended in 2017.5Internal Revenue Service. Notice 2018-24 – Request for Comments on Scope of Determination Letter Program for Individually Designed Plans If your plan is ongoing and doesn’t fit one of the categories above, you can’t apply. You maintain compliance instead by timely adopting amendments from the IRS’s annual Required Amendments List.
Do You Actually Need Your Own Letter?
Most employers don’t. They use pre-approved plans: standardized documents drafted by a financial institution, recordkeeper, or benefits firm and submitted to the IRS for an Opinion Letter or Advisory Letter. When you adopt a pre-approved plan without making material changes, you rely on the provider’s letter and never need to file for your own.6Internal Revenue Service. Pre-approved Retirement Plans
The trap is modification. If you change a pre-approved plan beyond the options the document offers, the plan can become individually designed, and the provider’s letter no longer shelters you.7Internal Revenue Service. What Is a Favorable Determination Letter A sponsor adds custom provisions, doesn’t realize the plan has crossed the line, and ends up with modified terms that no IRS letter backs. If you’re in that position and you fall within one of the eligibility categories, applying for your own determination letter is the way to get documented assurance.
Choosing Between Form 5300 and Form 5310
The IRS uses two primary forms, and filing the wrong one gets your application returned.8Internal Revenue Service. Apply for a Determination Letter – Individually Designed Plans
Form 5300 covers initial qualification of a defined benefit or defined contribution plan and the exempt status of the related trust. It’s also the form for merged-plan determinations.9Internal Revenue Service. About Form 5300 Application for Determination for Employee Benefit Plan
Form 5310 is for terminating plans.10Internal Revenue Service. About Form 5310 Watch its limits: Form 5310 cannot be used for partial terminations, multiemployer plans covered by PBGC insurance, or affiliated service group members. In those situations, file Form 5300 instead.11Internal Revenue Service. Instructions for Form 5310 A Form 5310 filing also has to include information on how assets will be distributed, a statement that all plan liabilities have been satisfied or provided for, and a detailed accounting of proposed distributions to participants.
Assembling the Application Package
The form is only the cover sheet. Your submission needs to include:
- The complete, executed plan document and the associated trust agreement.
- All amendments adopted since inception or since the last favorable determination letter, in chronological order.
- The adoption agreement, if applicable, showing the employer’s elections.
- The Procedural Requirements Checklist that accompanies the form.
For defined benefit plans, an actuarial certification from an enrolled actuary is often required. On the form itself, the plan sponsor’s EIN, the plan name and number, the effective date, participant counts by status as of the most recent plan year-end, and coverage and nondiscrimination information all have to be filled in. Blanks trigger an Information Document Request and slow the whole review down.
The effective date of the plan or amendment you’re submitting is the reference point the IRS uses to measure compliance. Errors in that date are hard to unwind once review starts.
Notice to Interested Parties
Before filing, notify “interested parties” that the application is coming. Interested parties generally include current employees eligible to participate in the plan, along with other employees whose principal place of employment is the same as eligible participants.12Internal Revenue Service. Retirement Plan Notices to Interested Parties
The window is tight. Notice must go out no fewer than 10 days and no more than 24 days before you submit the application.12Internal Revenue Service. Retirement Plan Notices to Interested Parties The notice tells employees about the filing, where they can inspect plan documents, and how to comment to the Department of Labor or the IRS. Your package must include certification that notice was properly distributed; a defect here is grounds for the IRS to return the application unprocessed.
Filing and the User Fee
Since July 1, 2022, Forms 5300 and 5310 must be submitted electronically through Pay.gov. Paper filing is no longer accepted.13Internal Revenue Service. Instructions for Form 5300 The user fee is paid at the same time. For 2026, the Form 5300 fee for a qualified plan is $4,000 and the Form 5310 termination fee is $4,500. The application won’t be processed until the correct fee arrives, and if the application is later returned as incomplete, the fee is forfeited.
What Happens During Review
Once your application clears the initial screening for the correct form, required attachments, fee, and interested-parties certification, it gets a control number and lands with an Employee Plans specialist agent. The agent reviews the plan document provision by provision against the qualification requirements: vesting schedules, distribution rules, contribution limits, coverage requirements, nondiscrimination standards.
Expect Information Document Requests along the way. Each carries a specific deadline. Thorough, prompt replies keep the file moving; inadequate responses can cause the agent to close the case without a letter, and if that happens the user fee is gone and you start over.
Agents try to resolve issues informally first. That often means proposing minor amendments to bring the document into compliance. If you agree to make the changes, the application heads toward a favorable letter. If not, the case moves toward a proposed adverse determination.
What a Favorable Letter Gives You
A favorable determination letter says the IRS found your plan document satisfies the qualification requirements as of the letter’s date. It has no expiration.7Internal Revenue Service. What Is a Favorable Determination Letter You can rely on it as proof of qualified status for the provisions that were reviewed, but reliance ends when:
- You amend a provision that the letter covered.
- A later change in law affects the qualification requirements.
- The application contained a misstatement or omission of material facts, or the facts materially change after the determination.
If You Receive a Proposed Adverse Determination
If the IRS concludes your document has defects that prevent qualification, it issues a proposed adverse determination letter detailing the problems. This isn’t final. It’s a 30-day letter.
You have 30 days from the date on the letter to file a written protest. The protest goes to the IRS address shown on the letter, not directly to the IRS Independent Office of Appeals. Sending it to Appeals delays the process and can prevent your case from being considered.14Internal Revenue Service. Preparing a Request for Appeals The issuing office reviews your protest first and, if it holds its position, forwards the case to Appeals for independent review.15Internal Revenue Service. Publication 892 – How to Appeal an IRS Determination on Tax-Exempt Status
The other path is to amend the plan to fix the identified defects and file a fresh application. That means paying the user fee again, but for straightforward problems it can be quicker than appeals.
Staying Qualified After the Letter
The letter is a snapshot. Qualified status has to be maintained.
Each year the IRS publishes a Required Amendments List identifying changes in qualification requirements that individually designed plans must address through timely amendments.4Internal Revenue Service. Rev. Proc. 2022-40 The 2025 RA List sets a general amendment deadline of December 31, 2027 for items on that list.16Internal Revenue Service. 2025 Required Amendments List for Qualified and Section 403(b) Plans – Notice 2025-60 Miss a deadline and you can create a disqualifying provision even though your original document received a favorable letter.
Separately, the IRS publishes an Operational Compliance List covering changes that affect how the plan is run day to day. A plan must comply operationally with each relevant requirement from the effective date of the change, whether or not it appears on the list.17Internal Revenue Service. Operational Compliance List
If a defect surfaces later, the Employee Plans Compliance Resolution System offers correction paths that can preserve qualified status, including the Voluntary Correction Program for document and operational failures discovered before audit.18Internal Revenue Service. EPCRS Overview19Internal Revenue Service. Voluntary Correction Program – General Description Using VCP allows retroactive correction and is a far better outcome than disqualification if you discover a document problem the determination letter didn’t catch or that arose after it issued.