What Is Form 5330? Excise Taxes, Filers, and Deadlines

IRS Form 5330 is the return employers, plan sponsors, and other disqualified persons use to report and pay excise taxes triggered by problems with a retirement plan. Those problems include prohibited transactions between the plan and insiders, missed minimum funding contributions, contributions above the deductible limit, and employer reversions when a plan terminates. The taxes start at 5%, 10%, 15%, 20%, or 50% depending on the violation, and can climb to 100% of the amount involved if the underlying problem is never corrected.

What Excise Taxes the Form Covers

Each excise tax reported on Form 5330 sits under its own section of the Internal Revenue Code, and each has its own rate, base, and deadline. Four come up most often.

Prohibited Transactions

A prohibited transaction is a deal between the plan and a “disqualified person” that the tax code forbids: lending plan money to the employer, selling property between a fiduciary and the plan, or using plan assets for personal benefit, among others. The initial tax is 15% of the amount involved for each year or partial year in the taxable period.¹

If the transaction is not corrected before the taxable period ends, a second-tier tax of 100% of the amount involved applies.¹ Correction means undoing the transaction so the plan ends up no worse off than if the fiduciary had followed the highest standards from the start.²

Minimum Funding Deficiencies

Defined benefit plans and certain other plans need minimum annual contributions. When the employer falls short, the excise tax rate under IRC Section 4971(a) depends on the plan type:³

Single-employer plans: 10% of the aggregate unpaid minimum required contributions.
Multiemployer plans: 5% of the accumulated funding deficiency.
CSEC plans: 10% of the accumulated funding deficiency.

If the deficiency remains uncorrected through the end of the taxable period, a 100% second-tier tax applies to whatever amount is still outstanding.⁴ The sponsoring employer is liable.

Nondeductible Contributions

When an employer contributes more to a qualified plan than the tax code allows as a deduction, the excess triggers a 10% excise tax under IRC Section 4972. The tax is calculated on the nondeductible amount as of the close of the employer’s tax year, and it keeps accruing at 10% each year until the excess is eliminated.⁵

Employer Reversions

When a qualified plan terminates and the employer takes back leftover assets, the reversion is taxed at 20% under IRC Section 4980. That rate jumps to 50% unless the employer either establishes a qualified replacement plan or provides pro-rata benefit increases to participants before the reversion.⁶ Most employers who take reversions without meeting those conditions end up paying the 50% rate.

Other Taxes on the Form

Form 5330 also collects less common excise taxes: excess contributions to SEPs and SIMPLE IRAs, excess fringe benefits, certain tax-exempt entity transactions under Section 4965, and failures to provide required benefit reduction notices under Section 4980F. The form’s instructions list every covered code section and the part of the form that goes with it.

Who Files Form 5330

Liability depends on which tax is at issue. The sponsoring employer files and pays for funding deficiencies, nondeductible contributions, and reversions. For prohibited transactions, the disqualified person who participated in the deal is personally on the hook. Under IRC Section 4975(e)(2), disqualified persons include plan fiduciaries, service providers to the plan, the sponsoring employer, 50% owners of the employer, family members of any of those people, entities they control, and certain officers, directors, and highly compensated employees.¹ More than one disqualified person can be liable for the same transaction, though the IRS collects the tax only once.

When Form 5330 Is Due

Deadlines vary with the code section that triggered the tax:⁷

Prohibited transactions (Section 4975): the last day of the 7th month after the end of the filer’s tax year. For a calendar-year individual, July 31.
Minimum funding deficiencies (Section 4971): the 15th day of the 10th month after the last day of the plan year. For a December 31 plan year, October 15.
Nondeductible contributions (Section 4972): the last day of the 7th month after the end of the employer’s tax year.
Reversions (Section 4980): the last day of the month after the month the reversion occurred.

When a due date falls on a weekend or legal holiday, the return is due the next business day. If the same filer owes multiple excise taxes with the same due date for the same plan, they go on one Form 5330; different plans mean separate forms.⁷

Extensions

As of January 1, 2024, Form 5558 is no longer used to request an extension for Form 5330.⁸ Filers now use Form 8868, which can provide up to six additional months from the original due date.⁹ An extension gives more time to file, not more time to pay. Interest keeps running on any unpaid balance from the original due date.

How to File and Pay

Filers who are required to file at least 10 returns of any type during the calendar year the Form 5330 is due must file it electronically through the IRS Modernized e-File (MeF) system using an authorized e-file provider. The mandate applies to tax years ending on or after December 31, 2023.¹⁰ Sending a paper return when you were required to e-file counts as a failure to file, even if the paper form arrives on time.¹¹

The IRS waived mandatory e-filing for all Form 5330 filers for the tax year ending December 31, 2025.¹¹ Whether that waiver extends to 2026 has not been announced, so filers who meet the 10-return threshold should plan on e-filing unless another waiver is issued.

Filers not subject to the electronic requirement mail paper returns to:

Department of the Treasury
Internal Revenue Service Center
Ogden, UT 84201⁷

The full excise tax is due when the return is filed. Payment options include a check or money order payable to the U.S. Treasury, EFTPS, or debit or credit card. For the first quarter of 2026, the IRS underpayment interest rate is 7% per year, compounded daily; for the second quarter, it drops to 6%.¹²¹³

What Late Filing and Uncorrected Violations Cost

The late-filing penalty is 5% of the unpaid tax for each month or partial month the return is overdue, capped at 25%.¹¹ It can be waived for reasonable cause, but not knowing the tax existed rarely counts.

These penalties stack on top of the excise tax and interest. An employer who misses a minimum funding contribution, skips the initial 10% tax, lets the correction period lapse so the 100% second-tier tax applies, and then files late is looking at the full deficiency, 25% of that amount in filing penalties, and daily compounding interest from the original due date. That is why the two-tier design of the prohibited-transaction and funding-deficiency taxes works the way it does: fixing the underlying problem before the taxable period closes is almost always cheaper than any alternative.

The IRS also runs the Employee Plans Compliance Resolution System (EPCRS), which lets sponsors self-correct certain failures or submit a voluntary correction before an audit. EPCRS will not necessarily wipe out an excise tax that has already been triggered, but timely correction can keep the problem from escalating to the second tier and helps demonstrate good faith.¹⁴

Keep the records that prove correction. Transaction documentation, actuarial certifications, and calculation worksheets are the paperwork that tends to disappear years later, exactly when the IRS asks for it.¹⁵

1
Office of the Law Revision Counsel. 26 U.S. Code 4975 – Tax on Prohibited Transactions
2
Internal Revenue Service. Retirement Topics – Tax on Prohibited Transactions
3
Office of the Law Revision Counsel. 26 USC 4971 – Taxes on Failure to Meet Minimum Funding Standards
4
Office of the Law Revision Counsel. 26 U.S. Code 4971 – Taxes on Failure to Meet Minimum Funding Standards
5
Office of the Law Revision Counsel. 26 U.S. Code 4972 – Tax on Nondeductible Contributions to Qualified Employer Plans
6
Office of the Law Revision Counsel. 26 U.S. Code 4980 – Tax on Reversion of Qualified Plan Assets to Employer
7
Internal Revenue Service. Instructions for Form 5330
8
Internal Revenue Service. About Form 5558, Application for Extension of Time to File Certain Employee Plan Returns
9
Internal Revenue Service. Form 8868
10
Internal Revenue Service. Mandatory Electronic Filing for Certain Form 5330 Filers Using the IRS Modernized e-File System (MeF)
11
Internal Revenue Service. Form 5330 Corner
12
Internal Revenue Service. Interest Rates Remain the Same for the First Quarter of 2026
13
Internal Revenue Service. Internal Revenue Bulletin 2026-8
14
Internal Revenue Service. EPCRS Overview
15
Internal Revenue Service. Maintaining Your Retirement Plan Records