The penalty for late filing of Form 5500 comes from two agencies at once. The Department of Labor can assess up to $2,739 per day with no cap, and the IRS adds $250 per day up to $150,000 per return. A single plan year that sits delinquent for twelve months can generate combined exposure approaching $1.15 million before interest. The good news: voluntary correction programs cut that to a flat few hundred or few thousand dollars, but only if you file before a penalty notice arrives.
What You Owe if You Do Nothing
Form 5500 is due the last day of the seventh month after the plan year ends. For a calendar-year plan, that’s July 31. Miss it by a day and the clock starts at both agencies.
The DOL Penalty
Under ERISA, the DOL can charge up to $2,739 per day for 2026 against any plan administrator who fails to file a timely annual report.1Office of the Law Revision Counsel. 29 USC 1132 – Civil Enforcement The figure is the inflation-adjusted version of the original $1,000-per-day statutory amount and moves each January.2U.S. Department of Labor. Adjusting ERISA Civil Monetary Penalties for Inflation
There is no ceiling. The daily amount runs from the original due date until a complete return is filed. A twelve-month delinquency alone puts DOL exposure near $1 million. Multiple delinquent years stack: each year’s penalty runs separately. And the liability falls on the plan administrator personally, which usually means the sponsoring employer’s officers or board members.
The IRS Penalty
The IRS charges its own $250 per day, capped at $150,000 per return.3Office of the Law Revision Counsel. 26 USC 6652 – Failure to File Certain Information Returns, Registration Statements, Etc. It runs alongside the DOL penalty, not instead of it, so both agencies can be owed for the same missed filing. The IRS cap is reached in about 600 days, meaning any delinquency past roughly twenty months sits at $150,000 on the IRS side while the DOL amount keeps climbing.
Attached schedules carry their own penalties. A late Schedule SB on a defined benefit plan draws $1,000 per actuarial report.4U.S. Department of Labor. Schedule SB (Form 5500) 2024 A late Form 8955-SSA, which reports separated participants with deferred vested benefits, costs $10 per day per unreported participant, up to $50,000 per plan year.5Internal Revenue Service. Penalties Related to the Filing of Forms 8955-SSA A plan with a large separated-participant list runs that number up fast.
There is a bigger risk hidden behind the dollar figures. Repeated or severe filing failures can jeopardize the plan’s tax-qualified status. Loss of qualification makes trust investment income taxable and can create adverse tax consequences for every participant. The IRS number is often the smaller one on paper. The qualification threat is not.
How to Cut the Penalty: The DFVCP
The DOL’s Delinquent Filer Voluntary Compliance Program is the main way to shrink the bill. It replaces the $2,739-per-day statutory rate with a flat $10 per day, subject to hard caps by plan size. The condition is timing: you must file voluntarily before receiving written notice from the DOL that the return is delinquent. Once that letter arrives, the program is closed for that plan year.6U.S. Department of Labor. Delinquent Filer Voluntary Compliance Program
The caps work like this:7Employee Benefits Security Administration. DFVC Penalty Calculator
- Small plans with fewer than 100 participants: $10 per day, capped at $750 per annual report. If multiple years are delinquent for the same plan, the total is capped at $1,500. Small plans sponsored by a 501(c)(3) organization have a per-plan cap of $750.
- Large plans with 100 or more participants: $10 per day, capped at $2,000 per annual report, with a $4,000 total cap across multiple delinquent years for the same plan.
- Top hat plans, apprenticeship and training plans, and late M-1 filings: a flat $750 per filing.
Compare that to the uncapped statutory number. A small plan three years behind owes at most $1,500 under the DFVCP versus a theoretical statutory exposure in the millions. For anyone eligible, using the program is not a close call.
How the DFVCP Filing Works
The plan administrator files a complete Form 5500 or 5500-SF electronically through EFAST2 for each delinquent year and checks the “DFVC Program” box in Part I, Line D.6U.S. Department of Labor. Delinquent Filer Voluntary Compliance Program Once the filing is processed, the administrator uses the DOL’s online calculator and payment system to pay the reduced amount. Paper payments are not accepted. The penalty cannot be paid from plan assets. The administrator is personally on the hook.
Automatic IRS Relief for DFVCP Filers
Completing the DFVCP usually clears the parallel IRS penalties too. The IRS waives several penalties for plans that finish a DFVCP filing, including the $250-per-day late 5500 penalty, the $1,000 late actuarial report penalty, and penalties tied to Form 8955-SSA and change-of-status notifications.8Internal Revenue Service. IRS Penalty Relief for DOL DFVC Filers of Late Annual Reports The waiver does not extend to every possible IRS penalty, and it does not cover one-participant plans filing Form 5500-EZ, because those plans cannot use the DFVCP at all.
Solo 401(k) and Other One-Participant Plans
One-participant plans, including a solo 401(k) covering only an owner and spouse, sit outside the DFVCP because they are not subject to Title I of ERISA. They file Form 5500-EZ instead of the standard Form 5500, and a filing is only required once total plan assets exceed $250,000 at year end. If an employer maintains more than one such plan, all of them are combined to test that threshold. A 5500-EZ is always required in the plan’s final year, regardless of assets.9Internal Revenue Service. Instructions for Form 5500-EZ
The IRS runs a separate relief program for late 5500-EZ filers. The fee is $500 per delinquent return, capped at $1,500 per submission when several years for the same plan are filed together.10Internal Revenue Service. Penalty Relief Program for Form 5500-EZ Late Filers Without relief, the standard $250-per-day, $150,000-cap penalty applies to each return. The program closes once the IRS has issued a CP 283 penalty notice for the overdue return.
If a Penalty Notice Already Arrived
Once written notice is out, both voluntary programs are off the table for that year, and the only remaining path is a reasonable cause waiver. That means showing the plan administrator used ordinary business care but still could not file on time because of circumstances beyond their control.
Waivers tend to succeed when the responsible person died or became seriously ill, when plan records were destroyed by fire or natural disaster, or when the administrator relied in writing on incorrect advice from the agency itself. Simple oversight, a forgotten deadline, or a busy tax season generally does not qualify. The written request goes to the agency that issued the notice, with documentation attached.
Reasonable cause is discretionary. The agency can say no. That unpredictability is the whole reason to act before a notice arrives rather than plan to argue afterward.
One Boundary: Disaster Relief
When a presidentially declared disaster hits, the IRS, DOL, and PBGC can grant automatic extensions for affected filers. Any Form 5500 extension the IRS announces is automatically honored by the DOL and PBGC without a separate notice.11U.S. Department of Labor. Disaster Relief Information for Employers and Advisers Relief covers administrators, employers, and service providers inside the disaster area, and also filers outside the zone who cannot obtain information from a disrupted bank, insurer, or provider. No separate application is needed once the IRS announces the relief. Keep documentation showing you were in the affected area or dependent on a disrupted provider.
What to Do Right Now
Check the mail first. If no penalty notice has come, the DFVCP or the 5500-EZ relief program is still open, and the reduced-penalty math is dramatic. Pull the plan’s financial records for each delinquent year, prepare complete returns, and file electronically through EFAST2 as soon as possible. Every additional day still adds $10 under the DFVCP until the cap is hit, so speed helps.
If a notice has already arrived, file the delinquent returns immediately to stop the daily accrual, then submit a reasonable cause waiver request with the strongest supporting evidence you can put together. A partial waiver still saves real money when the underlying penalties run this high.