Instructions for Form 5330

(Rev. December 2023)

Return of Excise Taxes Related to Employee Benefit Plans

Department of the Treasury

Internal Revenue Service

Section references are to the Internal Revenue Code unless 

otherwise noted.

Future Developments

For the latest information about developments related to 

Form 5330 and its instructions, such as legislation enacted 

after they were published, go to IRS.gov/Form5330.

What’s New

Mandatory electronic filing. Under final regulations (T.D. 

9972) issued in February 2023, any employer or individual 

required to file an excise tax return on Form 5330 must file 

the excise tax return electronically for tax years ending on or 

after December 31, 2023, if the filer is required to file at least 

10 returns of any type during the calendar year that the Form 

5330 is due. See Regulations section 54.6011-3 for more 

information.

Extension. Effective in 2024, Form 8868, Application for 

Extension of Time To File an Exempt Organization Return or 

Excise Taxes Related to Employee Benefit Plans, is used to 

request an extension of time to file Form 5330. If approved, 

you may be granted an extension of up to 6 months after the 

normal due date of Form 5330. Form 5558, Application for 

Extension of Time To File Certain Employee Plan Returns, is 

no longer used for an extension of time to file Form 5330.

General Instructions

Purpose of Form

File Form 5330 to report the tax on:

• A prohibited tax shelter transaction (section 4965(a)(2));

• A minimum funding deficiency (section 4971(a) and (b));

• A failure to pay liquidity shortfall (section 4971(f));

• A failure to comply with a funding improvement or 

rehabilitation plan (section 4971(g)(2));

• A failure to meet requirements for plans in endangered or 

critical status (section 4971(g)(3));

• A failure to adopt rehabilitation plan (section 4971(g)(4));

• A failure to adopt funding restoration plan

(section 4971(h));

• Nondeductible contributions to qualified plans

(section 4972);

• Excess contributions to a section 403(b)(7)(A) custodial 

account (section 4973(a)(3));

• A prohibited transaction (section 4975);

• A disqualified benefit provided by funded welfare plans 

(section 4976);

• Excess fringe benefits (section 4977);

• Certain employee stock ownership plan (ESOP) 

dispositions (section 4978);

• Excess contributions to plans with cash or deferred 

arrangements (section 4979);

• Certain prohibited allocations of qualified securities by an 

ESOP (section 4979A);

• Reversions of qualified plan assets to employers

(section 4980); and

• A failure of an applicable plan reducing future benefit 

accruals to satisfy notice requirements (section 4980F).

Who Must File

A Form 5330 must be filed by any of the following.

1. A plan entity manager of a tax-exempt entity who 

approves, or otherwise causes the entity to be party to, a 

prohibited tax shelter transaction during the tax year and 

knows or has reason to know the transaction is a prohibited 

tax shelter transaction under section 4965(a)(2).

2. An employer liable for the tax under section 4971 for 

failure to meet the minimum funding standards under

section 412.

3. An employer liable for the tax under section 4971(f) for 

a failure to meet the liquidity requirement of section 430(j) (or 

section 412(m)(5) as it existed prior to amendment by the 

Pension Protection Act of 2006 (PPA '06)), for plans with 

delayed effective dates under PPA '06.

4. An employer with respect to a multiemployer plan 

liable for the tax under section 4971(g)(2) for failure to comply 

with a funding improvement or rehabilitation plan under 

section 432.

5. An employer with respect to a multiemployer plan 

liable for the tax under section 4971(g)(3) for failure to meet 

the requirements for plans in endangered or critical status 

under section 432.

6. A multiemployer plan sponsor liable for the tax under 

section 4971(g)(4) for failure to adopt a rehabilitation plan 

within the time required under section 432.

7. A cooperative and small employer charity (CSEC) plan 

sponsor liable for the tax under section 4971(h) for failure to 

adopt a funding restoration plan within the time required 

under section 433(j)(3).

8. An employer liable for the tax under section 4972 for 

nondeductible contributions to qualified plans.

9. An individual liable for the tax under section 4973(a)(3) 

because an excess contribution to a section 403(b)(7)(A) 

custodial account was made for them and that excess has 

not been eliminated, as specified in sections 4973(c)(2)(A) 

and (B).

10. A disqualified person liable for the tax under

section 4975 for participating in a prohibited transaction 

(other than a fiduciary acting only as such), or an individual or 

the individual’s beneficiary who engages in a prohibited 

transaction with respect to the individual’s retirement 

account, unless section 408(e)(2)(A) or section 408(e)(4) 

applies, for each tax year or part of a tax year in the taxable 

period applicable to such prohibited transaction.

11. An employer liable for the tax under section 4976 for 

maintaining a funded welfare benefit plan that provides a 

disqualified benefit during any tax year.

12. An employer who pays excess fringe benefits and has 

elected to be taxed under section 4977 on such payments.

13. An employer or worker-owned cooperative, as defined 

in section 1042(c)(2), that maintains an employee stock 

Jan 19, 2024 Cat. No. 11871X
ownership plan (ESOP) that disposes of the qualified 

securities, as defined in section 1042(c)(1), within the 

specified 3-year period (see section 4978).

14. An employer liable for the tax under section 4979 on 

excess contributions to plans with a cash or deferred 

arrangement, etc.

15. An employer or worker-owned cooperative that made 

the written statement described in section 664(g)(1)(E) or 

1042(b)(3)(B) and made an allocation prohibited under 

section 409(n) of qualified securities of an ESOP taxable 

under section 4979A; or, an employer or worker-owned 

cooperative who made an allocation of S corporation stock of 

an ESOP prohibited under section 409(p) taxable under 

section 4979A.

16. An employer who receives an employer reversion from 

a deferred compensation plan taxable under section 4980.

17. An employer or multiemployer plan liable for the tax 

under section 4980F for failure to give notice of a significant 

reduction in the rate of future benefit accrual.

A Form 5330 and tax payment is required for any of the 

following.

• Each year any of the following under Who Must File, 

earlier, apply: (1), (2), (3), (5), (6), (7), (8), (9), (10), (11), (12), 

(13), (14), or (16).

• Each failure of an employer to make the required 

contribution to a multiemployer plan, as required by a funding 

improvement or rehabilitation plan under section 432.

• A reversion of plan assets from a qualified plan taxable 

under section 4980.

• Each year or part of a year in the taxable period in which a 

prohibited transaction occurs under section 4975. See the 

instructions for Schedule C, line 2, columns (d) and (e), for a 

definition of “taxable period.”

When To File

File one Form 5330 to report all excise taxes with the same 

filing due date. However, if the taxes are from separate plans, 

file separate forms for each plan.

Generally, filing Form 5330 starts the statute of limitations 

running only with respect to the particular excise tax(es) 

reported on that Form 5330. However, statutes of limitations 

with respect to the prohibited transaction excise tax(es) are 

based on the filing of the applicable Form 5500, Annual 

Return/Report of Employee Benefit Plan.

Use Table 1 to determine the due date of Form 5330.

Extension. Effective in 2024, a filer must use Form 8868, 

Application for Extension of Time To File an Exempt 

Organization Return or Excise Taxes Related to Employee 

Benefit Plans, to request for an extension of time to file Form 

5330. You may be granted an extension of up to 6 months 

after the normal due date of Form 5330 if Form 8868 is filed 

on or before the normal due date (not including any 

extensions) of the return. Form 5558, Application for 

Extension of Time To File Certain Employee Plan Returns, is 

no longer used for an extension of time to file Form 5330.

You must file a separate Form 8868 for each excise tax 

that has a different filing due date for the Form 5330. 

However, you can file one Form 8868 if each excise tax on 

the Form 5330 has the same filing due date.

Form 8868 does not extend the time to pay your 

taxes. Any tax due must be paid with this application 

for an extension of time to file Form 5330. 

Additionally, interest is charged on taxes not paid by the due 

date even if an extension of time to file is granted. See the 

instructions for Form 8868.

How To File

Electronic filing. An employer or an individual required to 

file an excise tax return related to employee benefit plans can 

file Form 5330 electronically using the IRS Modernized e-file 

(MeF) System through an IRS Authorized e-filing Provider. All 

filers are encouraged to file Form 5330 electronically 

because it is safe, easy to complete, and you have an 

immediate record that the return was filed.

Mandatory electronic filing. Under Regulations section 

54.6011-3, any employer or individual required to file an 

excise tax return on Form 5330 must file the excise tax return 

electronically for tax years ending on or after December 31, 

2023, if the filer is required to file at least 10 returns of any 

type during the calendar year that the Form 5330 is due. See 

T.D. 9972 for more information. The failure to file a return 

electronically when required is deemed a failure to file the 

return even if the filer submits a paper return.

“Returns” for purposes of these instructions include 

information returns (for example, Forms W-2 and Forms 

1099), income tax returns, employment tax returns (including 

quarterly Forms 941, Employer's Quarterly Federal Tax 

Return), and excise tax returns.

On a year-by-year and form-by-form basis, the IRS may 

waive the requirement to file Form 5330 electronically in 

cases of undue hardship. In certain circumstances, a filer 

may be administratively exempt from the requirement to file 

electronically. If the IRS's systems do not support electronic 

filing, the filer will not be required to file electronically. The 

filer should maintain documentation supporting their undue 

hardship or other applicable reason for not filing electronically 

in the filer's records. For more information about mandatory 

electronic filing based on the 10-return threshold, waivers, 

and exemptions, see Regulations section 54.6011-3.

Paper forms for filing. Form 5330 can be filed on paper if a 

filer is not subject to the electronic filing requirement under 

Regulations section 54.6011-3. The official IRS printed Form 

5330 can be found on the IRS website and downloaded to 

your computer to print and sign before mailing to the address 

specified in these instructions. See Where To File below. You 

can complete paper Form 5330 by hand with pen or 

typewriter using only blue or black ink. Entries should not 

exceed the lines provided on the form. You can find Form 

5330 and its instructions by visiting the IRS Internet website 

at IRS.gov/FormsPubs.

Where To File

File the paper Form 5330 at the following address:

Department of the Treasury

Internal Revenue Service Center

Ogden, UT 84201

Note. If an employer or individual required to file the Form 

5330 fails to file the return electronically when required to do 

so, the filer is considered not to have filed the return even if 

the filer submits a paper return. See Regulations section 

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2 Instructions for Form 5330
301.6651-1 for more information relating to the failure to file a 

tax return.

Private delivery services (PDSs). You can use certain 

private delivery services (PDSs) designated by the IRS to 

meet the “timely mailing as timely filing/paying” rule for tax 

returns and payments. Go to IRS.gov/PDS for the current list 

of designated services.

The PDS can tell you how to get written proof of the 

mailing date.

For the IRS mailing address to use if you're using a PDS, 

go to IRS.gov/PDSstreetAddresses.

Private delivery services cannot deliver items to P.O. 

boxes. You must use the U.S. Postal Service to mail 

any item to an IRS P.O. box address.

Interest and Penalties

Interest. We are required by law to charge interest when you 

do not pay your liability on time. Generally, we calculate 

interest on any unpaid balance from the due date of your 

return (regardless of extensions of time to file) until you pay 

the amount you owe in full, including accrued interest and 

any penalty charges. Interest on some penalties accrues on 

any unpaid balance from the date we notify you of the penalty 

until it is paid in full. Interest on other penalties, such as 

CAUTION

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failure to file a tax return, starts from the due date or 

extended due date of the return. Interest rates are variable 

and may change quarterly. (See section 6601.)

Penalty for late filing of return. If you do not file a return by 

the due date, including extensions, you may have to pay a 

penalty of 5% of the unpaid tax for each month or part of a 

month the return is late, up to a maximum of 25% of the 

unpaid tax. The penalty will not be imposed if you can show 

that the failure to file on time was due to reasonable cause. If 

you file late, you may attach a statement to Form 5330 

explaining the reasonable cause.

Penalty for late payment of tax. If you do not pay the tax 

when due, you may have to pay a penalty of 1/2 of 1% of the 

unpaid tax for each month or part of a month the tax is not 

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 

time was due to reasonable cause.

Interest and penalties for late filing and late payment will 

be billed separately after the return is filed.

Claim for Refund or Credit/Amended Return

File an amended Form 5330 for any of the following.

• To claim a refund of overpaid taxes reportable on Form 

5330.

• To receive a credit for overpaid taxes.

Excise Tax Due Dates

IF the taxes are due under 

section . . . THEN file Form 5330 by the . . .

4965 

15th day of the 5th month following the close of the entity manager's tax year during which the 

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.

Table 1.

Instructions for Form 5330 3
• To report additional taxes due within the same tax year of 

the filer if those taxes have the same due date as those 

previously reported. Check the box in item H of the Entity 

Section and report the correct amount of taxes on 

Schedule A through L, as appropriate, and on Part I, lines 1 

through 16. See the instructions for Part II, lines 17 through 

19.

If you file an amended return to claim a refund or credit, 

the claim must state in detail the reasons for claiming the 

refund. In order for the IRS to promptly consider your claim, 

you must provide the appropriate supporting evidence. See 

Regulations section 301.6402-2 for more details.

Specific Instructions

Filer tax year. Enter the tax year of the employer, entity, or 

individual on whom the tax is imposed by using the plan year 

beginning and ending dates entered in Part I of Form 5500 or 

by using the tax year of the business return filed.

Item A. Name and address of filer. Enter the name and 

address of the employer, individual, or other entity who is 

liable for the tax.

Include the suite, room, or other unit number after the 

street number. If the post office does not deliver mail to the 

street address and you have a P.O. box, show the box 

number instead of the street address.

If the plan has a foreign address, enter the information in 

the following order: city or town, state or province, country, 

and ZIP or foreign postal code. Follow the country's practice 

for entering the postal code. Do not abbreviate the country 

name.

Item B. Filer's identifying number. Enter the filer's 

identifying number in the appropriate section. The filer's 

identifying number is either the filer's employer identification 

number (EIN) or the filer's social security number (SSN), but 

not both. The identifying number of an individual, other than a 

sole proprietor with an EIN, is the individual’s SSN. The 

identifying number for all other filers is their EIN. The EIN is 

the nine-digit number assigned to the plan sponsor/employer, 

entity, or individual on whom the tax is imposed.

Item C. Name of plan. Enter the formal name of the plan or 

enough information to identify the plan.

This should be the same name indicated on the Form 

5500 series return/report if that form is required to be filed for 

the plan.

Item D. Name and address of plan sponsor. The term 

“plan sponsor” means:

1. The employer, for an employee benefit plan 

established or maintained by a single employer.

2. The employee organization, in the case of a plan of an 

employee organization.

3. The association, committee, joint board of trustees, or 

other similar group of representatives of the parties who 

establish or maintain the plan, if the plan is established or 

maintained jointly by one or more employers and one or more 

employee organizations, or by two or more employers.

Include the suite, room, or other unit number after the 

street number. If the post office does not deliver mail to the 

street address and you have a P.O. box, show the box 

number instead of the street address.

If the plan has a foreign address, enter the information in 

the following order: city or town, state or province, and 

country. Follow the country's practice for entering the postal 

code. Do not abbreviate the country name.

Item E. Plan sponsor's EIN. Enter the nine-digit EIN 

assigned to the plan sponsor. This should be the same 

number used to file the Form 5500 series return/report.

Item F. Plan year ending. “Plan year” means the calendar 

or fiscal year on which the records of the plan are kept. Enter 

eight digits in month/date/year order. This number assists the 

IRS in properly identifying the plan and time period for which 

Form 5330 is being filed. For example, a plan year ending 

March 31, 2022, should be shown as 03/31/2022.

Item G. Plan number. Enter the three-digit number that the 

employer or plan administrator assigned to the plan. This 

three-digit number is used with the EIN entered on item B 

and is used by the IRS, the Department of Labor, and the 

Pension Benefit Guaranty Corporation as a unique 12-digit 

number to identify the plan.

If the plan number is not provided, this will cause a 

delay in processing your return.

Item H. Amended return. If you are filing an amended Form 

5330, check the box on this line, and see the instructions for 

Part II, lines 17 through 19. Also, see Claim for Refund or 

Credit/Amended Return, earlier.

Filer's signature. To reduce the possibility of 

correspondence and penalties, please sign and date the 

form. Also, enter a daytime phone number where you can be 

reached.

Preparer's signature. Anyone who prepares your return 

and does not charge you should not sign your return. For 

example, a regular full-time employee or your business 

partner who prepares the return should not sign.

Generally, anyone who is paid to prepare the return must 

sign the return in the space provided and fill in the Paid 

Preparer's Use Only area. See section 7701(a)(36)(B) for 

exceptions.

In addition to signing and completing the required 

information, the paid preparer must give a copy of the 

completed return to the taxpayer.

Note. If Form 5330 is filed on paper, a paid preparer may 

sign original or amended returns by rubber stamp, 

mechanical device, or computer software program.

Part I. Taxes

Line 4. Enter the total amount of the disqualified benefit 

under section 4976. Section 4976 imposes an excise tax on 

employers who maintain a funded welfare benefit plan that 

provides a disqualified benefit during any tax year. The tax is 

100% of the disqualified benefit.

Generally, a disqualified benefit is any of the following.

• Any post-retirement medical benefit or life insurance 

benefit provided for a key employee unless the benefit is 

provided from a separate account established for the key 

employee under section 419A(d).

• Any post-retirement medical benefit or life insurance 

benefit unless the plan meets the nondiscrimination 

requirements of section 505(b) for those benefits.

• Any portion of the fund that reverts to the benefit of the 

employer.

CAUTION

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4 Instructions for Form 5330
Lines 5a and 5b. Section 4978 imposes an excise tax on 

the sale or transfer of securities acquired in a sale or qualified 

gratuitous transfer to which section 1042 or section 664(g) 

applied, respectively, if the sale or transfer takes place within 

3 years after the date of the acquisition of qualified securities, 

as defined in section 1042(c)(1) or a section 664(g) transfer.

The tax is 10% of the amount realized on the disposition of 

the qualified securities if an ESOP or eligible worker-owned 

cooperative, as defined in section 1042(c)(2), disposes of the 

qualified securities within the 3-year period described above, 

and either of the following applies.

• The total number of shares held by that plan or cooperative 

after the disposition is less than the total number of employer 

securities held immediately after the sale; or

• Except to the extent provided in regulations, the value of 

qualified securities held by the plan or cooperative after the 

disposition is less than 30% of the total value of all employer 

securities as of the disposition (60% of the total value of all 

employer securities in the case of any qualified employer 

securities acquired in a qualified gratuitous transfer to which 

section 664(g) applied).

See section 4978(b)(2) for the limitation on the amount of 

tax.

The section 4978 tax must be paid by the employer or the 

eligible worker-owned cooperative that made the written 

statement described in section 1042(b)(3)(B) on dispositions 

that occurred during their tax year.

The section 4978 tax does not apply to a distribution of 

qualified securities or sale of such securities if any of the 

following occurs.

• The death of the employee.

• The retirement of the employee after the employee has 

reached age 591/2.

• The disability of the employee (within the meaning of 

section 72(m)(7)).

• The separation of the employee from service for any 

period that results in a 1-year break in service, as defined in 

section 411(a)(6)(A).

For purposes of section 4978, an exchange of qualified 

securities in a reorganization described in section 368(a)(1) 

for stock of another corporation will not be treated as a 

disposition.

For section 4978 excise taxes, the amount entered 

on Part I, line 5a, is the amount realized on the 

disposition of qualified securities, multiplied by 10%. 

Also, check the appropriate box on line 5b.

Line 6. Section 4979A imposes a 50% excise tax on 

allocated amounts involved in any of the following.

1. A prohibited allocation of qualified securities by any 

ESOP or eligible worker-owned cooperative.

2. A prohibited allocation described in

section 664(g)(5)(A). Section 664(g)(5)(A) prohibits any 

portion of the assets of the ESOP attributable to securities 

acquired by the plan in a qualified gratuitous transfer to be 

allocated to the account of:

a. Any person related to the decedent within the meaning 

of section 267(b) or a member of the decedent's family within 

the meaning of section 2032A(e)(2); or

b. Any person who, at the time of the allocation or at any 

time during the 1-year period ending on the date of the 

acquisition of qualified employer securities by the plan, is a 

5% shareholder of the employer maintaining the plan.

3. The accrual or allocation of S corporation shares in an 

ESOP during a nonallocation year constituting a prohibited 

allocation under section 409(p).

4. A synthetic equity owned by a disqualified person in 

any nonallocation year.

Prohibited allocations for ESOP or worker-owned 

cooperative. For purposes of items 1 and 2 above, a 

“prohibited allocation of qualified securities by any ESOP or 

eligible worker-owned cooperative” is any allocation of 

qualified securities acquired in a nonrecognition-of-gain sale 

under section 1042, which violates section 409(n), and any 

benefit that accrues to any person in violation of

section 409(n).

Under section 409(n), an ESOP or worker-owned 

cooperative cannot allow any portion of assets attributable to 

employer securities acquired in a section 1042 sale to accrue 

or be allocated, directly or indirectly, to the taxpayer, or any 

person related to the taxpayer, involved in the transaction 

during the nonallocation period. For purposes of

section 409(n), “relationship to the taxpayer” is defined under 

section 267(b).

The nonallocation period is the period beginning on the 

date the qualified securities are sold and ending on the later 

of:

• 10 years after the date of sale, or

• The date on which the final payment is made if acquisition 

indebtedness was incurred at the time of sale.

The employer sponsoring the plan or the eligible 

worker-owned cooperative is responsible for paying the tax.

For purposes of items 3 and 4, under Line 6, earlier, the 

excise tax on these transactions under section 4979A is 50% 

of the amount involved. The amount involved includes the 

following.

1. The value of any synthetic equity owned by a 

disqualified person in any nonallocation year. “Synthetic 

equity” means any stock option, warrant, restricted stock, 

deferred issuance stock right, or similar interest or right that 

gives the holder the right to acquire or receive stock of the S 

corporation in the future. Synthetic equity may also include a 

stock appreciation right, phantom stock unit, or similar right to 

a future cash payment based on the value of the stock or 

appreciation; and nonqualified deferred compensation as 

described in Regulations section 1.409(p)-1(f)(2)(iv). The 

value of a synthetic equity is the value of the shares on which 

the synthetic equity is based or the present value of the 

nonqualified deferred compensation.

2. The value of any S corporation shares in an ESOP 

accruing during a nonallocation year or allocated directly or 

indirectly under the ESOP or any other plan of the employer 

qualified under section 401(a) for the benefit of a disqualified 

person. For additional information, see Regulations

section 1.409(p)-1(b)(2).

3. The total value of all deemed-owned shares of all 

disqualified persons.

For purposes of determining a nonallocation year, the 

attribution rules of section 318(a) will apply; however, the 

option rule of section 318(a)(4) will not apply. Additionally, the 

attribution rules defining family member are modified to 

include the individual's:

• Spouse,

• Ancestor or lineal descendant of the individual or the 

individual's spouse, and

Instructions for Form 5330 5
• A brother or sister of the individual or of the individual's 

spouse and any lineal descendant of the brother or sister.

A spouse of an individual legally separated from an 

individual under a decree of divorce or separate maintenance 

is not treated as the individual's spouse.

An individual is a disqualified person if:

• The total number of shares owned by the person and the 

members of the person's family, as defined in

section 409(p)(4)(D), is at least 20% of the deemed-owned 

shares, as defined in section 409(p)(4)(C), in the S 

corporation; or

• The person owns at least 10% of the deemed-owned 

shares, as defined in section 409(p)(4)(C), in the S 

corporation.

Under section 409(p)(7), the Secretary of the 

Treasury may, through regulations or other guidance 

of general applicability, provide that a nonallocation 

year occurs in any case in which the principal purpose of the 

ownership structure of an S corporation constitutes an 

avoidance or evasion of section 409(p). See Regulations 

section 1.408(p)-1.

For section 4979A excise taxes, the amount entered on 

Part I, line 6, is 50% of the amount involved in the prohibited 

allocations described in items 1 through 4, earlier, under 

Line 6.

Line 10a. Under section 4971(g)(2), each employer who 

contributes to a multiemployer plan and fails to comply with a 

funding improvement or rehabilitation plan will be liable for an 

excise tax for each failure to make a required contribution 

within the time frame under such plan. Enter the amount of 

each contribution the employer failed to make in a timely 

manner.

A “funding improvement plan” is a plan which consists of 

the actions, including options or a range of options to be 

proposed to the bargaining parties, formulated to provide, 

based on reasonably anticipated experience and reasonable 

actuarial assumptions, for the attainment of the following 

requirements by the plan during the funding improvement 

period.

1. The plan's funded percentage as of the close of the 

funding improvement period equals or exceeds a percentage 

equal to the sum of:

a. The percentage as of the beginning of the funding 

improvement period, plus

b. 33% of the difference between 100% and the 

percentage as of the beginning of the funding improvement 

period (or 20% of the difference if the plan is in seriously 

endangered status).

2. No accumulated funding deficiency for any plan year 

during the funding improvement period, taking into account 

any extension of the amortization period under

section 431(d).

A “rehabilitation plan” is a plan which consists of actions, 

including options or a range of options to be proposed to the 

bargaining parties, formulated to enable the plan to cease to 

be in critical status by the end of the rehabilitation period.

All or part of this excise tax may be waived under

section 4971(g)(5).

Line 16. If a tax-exempt entity manager approves or 

otherwise causes the entity to be a party to a prohibited tax 

shelter transaction during the year and knows or has reason 

CAUTION

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to know that the transaction is a prohibited tax shelter 

transaction, the entity manager must pay an excise tax under 

section 4965(b)(2).

For purposes of section 4965, plan entities are:

• Qualified pension, profit-sharing, and stock bonus plans 

described in section 401(a);

• Annuity plans described in section 403(a);

• Annuity contracts described in section 403(b);

• Qualified tuition programs described in section 529;

• Retirement plans maintained by a governmental employer 

described in section 457(b);

• Individual retirement accounts within the meaning of 

section 408(a);

• Individual retirement annuities within the meaning of 

section 408(b);

• Archer medical savings accounts (MSAs) within the 

meaning of section 220(d);

• Coverdell education savings accounts described in

section 530; and

• Health savings accounts (HSAs) within the meaning of

section 223(d).

An entity manager is the person who approves or 

otherwise causes the entity to be a party to a prohibited tax 

shelter transaction.

The excise tax under section 4965(a)(2) is $20,000 for 

each approval or other act causing the organization to be a 

party to a prohibited tax shelter transaction.

A “prohibited tax shelter transaction” is any listed 

transaction and any prohibited reportable transaction, as 

defined later.

1. A “listed transaction” is a reportable transaction that is 

the same as, or substantially similar to, a transaction 

specifically identified by the Secretary of the Treasury as a 

tax avoidance transaction for purposes of section 6011.

2. A “prohibited reportable transaction” is:

a. Any confidential transaction within the meaning of 

Regulations section 1.6011-4(b)(3), or

b. Any transaction with contractual protection within the 

meaning of Regulations section 1.6011-4(b)(4).

Part II. Tax Due

If you are filing an amended Form 5330 and you paid 

taxes with your original return and those taxes have 

the same due date as those previously reported, 

check the box in item H and enter the tax reported on your 

original return in the entry space for line 18. If you file Form 

5330 for a claim for refund or credit, show the amount of 

overreported tax in parentheses on line 19. Otherwise, show 

the amount of additional tax due on line 19 and include the 

payment with the amended Form 5330.

Lines 17 through 19. If you file Form 5330 on paper, make 

your check or money order payable to the “United States 

Treasury” for the full amount due. Attach the payment to your 

return. Write your name, identifying number, plan number, 

and “Form 5330, Section ____” on your payment.

File at the address shown under Where To File, earlier.

6 Instructions for Form 5330
Schedule A. Tax on Nondeductible 

Employer Contributions to Qualified 

Employer Plans (Section 4972)

Section 4972. Section 4972 imposes an excise tax on 

employers who make nondeductible contributions to their 

qualified plans. The excise tax is equal to 10% of the 

nondeductible contributions in the plan as of the end of the 

employer's tax year.

A “qualified employer plan” for purposes of this section 

means any plan qualified under section 401(a), any annuity 

plan qualified under section 403(a), and any simplified 

employee pension plan qualified under section 408(k) or any 

simple retirement account under section 408(p). The term 

qualified plan does not include certain governmental plans 

and certain plans maintained by tax-exempt organizations.

For purposes of section 4972, “nondeductible 

contributions” for the employer's current tax year are the sum 

of:

1. The excess (if any) of the employer's contribution for 

the tax year less the amount allowable as a deduction under 

section 404 for that year; and

2. The total amount of the employer's contributions for 

each preceding tax year that was not allowable as a 

deduction under section 404 for such preceding year, 

reduced by the sum of:

a. The portion of that amount available for return under 

the applicable qualification rules and actually returned to the 

employer prior to the close of the current tax year; and

b. The portion of such amount that became deductible for 

a preceding tax year or for the current tax year.

Although pre-1987 nondeductible contributions are not 

subject to this excise tax, they are taken into account to 

determine the extent to which post-1986 contributions are 

deductible. See section 4972 and Pub. 560, Retirement 

Plans for Small Business, for details.

Defined benefit plans exception. For purposes of 

determining the amount of nondeductible contributions 

subject to the 10% excise tax, the employer may elect not to 

include any contributions to a defined benefit plan except, in 

the case of a multiemployer plan, to the extent those 

contributions exceed the full-funding limitation (as defined in 

section 431(c)(6)). This election applies to terminated and 

ongoing plans. An employer making this election cannot also 

benefit from the exceptions for terminating plans and for 

certain contributions to defined contribution plans under 

section 4972(c)(6). When determining the amount of 

nondeductible contributions, the deductible limits under 

section 404(a)(7) must be applied first to contributions to 

defined contribution plans and then to contributions to 

defined benefit plans.

Defined contribution plans exception. In determining 

the amount of nondeductible contributions subject to the 10% 

excise tax, do not include any of the following.

• Employer contributions to one or more defined contribution 

plans that are nondeductible solely because of

section 404(a)(7) that do not exceed the matching 

contributions described in section 401(m)(4)(A).

• Contributions to a SIMPLE 401(k) or a SIMPLE IRA 

considered nondeductible because they are not made in 

connection with the employer's trade or business. However, 

this provision pertaining to SIMPLEs does not apply to 

contributions made on behalf of the employer or the 

employer's family.

For purposes of this exception, the combined plan 

deduction limits are first applied to contributions to the 

defined benefit plan and then to the defined contribution plan.

Restorative payments to a defined contribution plan are 

not considered nondeductible contributions if the payments 

are made to restore some or all of the plan's losses due to an 

action (or a failure to act) that creates a reasonable risk of 

liability for breach of fiduciary duty. Amounts paid in excess of 

the loss are not considered restorative payments.

For these purposes, multiemployer plans are not taken 

into consideration in applying the overall limit on deductions 

where there is a combination of defined benefit and defined 

contribution plans.

Schedule B. Tax on Excess 

Contributions to Section 403(b)(7)(A) 

Custodial Accounts

(Section 4973(a)(3))

Section 4973(a) imposes a 6% excise tax on excess 

contributions to section 403(b)(7)(A) custodial accounts at 

the close of the tax year. The tax is paid by the individual 

account holder.

Line 1. Enter total current year contributions, less any 

rollover contributions described in section 403(b)(8) or 408(d)

(3)(A).

Line 2. Enter the amount excludable under section 415(c) 

(limit on annual additions).

To determine the amount excludable for a specific 

year, see Pub. 571, Tax-Sheltered Annuity Plans 

(403(b) Plans), for that year.

The limit on annual additions under section 415(c)(1)(A) is 

subject to cost-of-living adjustments as described in

section 415(d). The dollar limit for a calendar year, as 

adjusted annually, is published during the fourth quarter of 

the prior calendar year in the Internal Revenue Bulletin.

Schedule C. Tax on Prohibited 

Transactions (Section 4975)

Section 4975. Section 4975 imposes an excise tax on a 

disqualified person who engages in a prohibited transaction 

with the plan.

Plan. For purposes of this section, the term “plan” means 

any of the following.

• A trust described in section 401(a) that forms part of a 

plan.

• A plan described in section 403(a) that is exempt from tax 

under section 501(a).

• An individual retirement account described in

section 408(a).

• An individual retirement annuity described in

section 408(b).

• An Archer MSA described in section 220(d).

• A Coverdell education savings account described in 

section 530.

• A Health Savings Account (HSA) described in section 

223(d).

• A trust described in section 501(c)(22).

TIP

Instructions for Form 5330 7
Note. For purposes of section 4975, the term “plan” does not 

include a section 403(b) tax-sheltered annuity plan. See 

section 4975(e).

If the IRS determined at any time that your plan was a 

plan as defined above, it will always remain subject to 

the excise tax on prohibited transactions under 

section 4975. This also applies to the tax on minimum 

funding deficiencies under section 4971.

Disqualified person. A “disqualified person” is a person 

who is any of the following.

1. A fiduciary.

2. A person providing services to the plan.

3. An employer, any of whose employees are covered by 

the plan.

4. An employee organization, any of whose members are 

covered by the plan.

5. A direct or indirect owner of 50% or more of:

a. The combined voting power of all classes of stock 

entitled to vote, or the total value of shares of all classes of 

stock of a corporation;

b. The capital interest or the profits interest of a 

partnership; or

c. The beneficial interest of a trust or unincorporated 

enterprise in (a), (b), or (c), which is an employer or an 

employee organization described in (3) or (4) above. A 

limited liability company should be treated as a corporation or 

a partnership, depending on how the organization is treated 

for federal tax purposes.

6. A member of the family of any individual described in 

(1), (2), (3), or (5). A “member of a family” is the spouse, 

ancestor, lineal descendant, and any spouse of a lineal 

descendant.

7. A corporation, partnership, or trust or estate of which 

(or in which) any direct or indirect owner holds 50% or more 

of the interest described in (5a), (5b), or (5c) of such entity. 

For this purpose, the beneficial interest of the trust or estate 

is owned, directly or indirectly, or held by persons described 

in (1) through (5).

8. An officer, director (or an individual having powers or 

responsibilities similar to those of officers or directors), a 10% 

or more shareholder or highly compensated employee 

(earning 10% or more of the yearly wages of an employer) of 

a person described in (3), (4), (5), or (7).

9. A 10% or more (in capital or profits) partner or joint 

venturer of a person described in (3), (4), (5), or (7).

10. Any disqualified person, as described in (1) through (9) 

above, who is a disqualified person with respect to any plan 

to which a section 501(c)(22) trust applies, that is permitted 

to make payments under section 4223 of the Employee 

Retirement Income Security Act (ERISA).

Prohibited transaction. A “prohibited transaction” is any 

direct or indirect:

1. Sale or exchange, or leasing of any property between 

a plan and a disqualified person; or a transfer of real or 

personal property by a disqualified person to a plan where 

the property is subject to a mortgage or similar lien placed on 

the property by the disqualified person within 10 years prior 

to the transfer, or the property transferred is subject to a 

mortgage or similar lien which the plan assumes;

2. Lending of money or other extension of credit between 

a plan and a disqualified person;

CAUTION

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3. Furnishing of goods, services, or facilities between a 

plan and a disqualified person;

4. Transfer to, or use by or for the benefit of, a disqualified 

person of income or assets of a plan;

5. Act by a disqualified person who is a fiduciary dealing 

with the income or assets of a plan in the disqualified 

person’s own interest or account; or

6. Receipt of any consideration for a disqualified person’s 

own personal account by any disqualified person who is a 

fiduciary from any party dealing with the plan connected with 

a transaction involving the income or assets of the plan.

Exemptions. See sections 4975(d), 4975(f)(6)(B)(ii), and 

4975(f)(6)(B)(iii) for specific exemptions to prohibited 

transactions. Also, see section 4975(c)(2) for certain other 

transactions or classes of transactions that may become 

exempt.

Line 1. Check the box that best characterizes the prohibited 

transaction for which an excise tax is being paid. A prohibited 

transaction is discrete unless it is of an ongoing nature. 

Transactions involving the use of money (loans, etc.) or other 

property (rent, etc.) are of an ongoing nature and will be 

treated as a new prohibited transaction on the first day of 

each succeeding tax year or part of a tax year that is within 

the taxable period.

Line 2, column (b). List the date of all prohibited 

transactions that took place in connection with a particular 

plan during the current tax year. Also, list the date of all 

prohibited transactions that took place in prior years unless 

either the transaction was corrected in a prior tax year or the 

section 4975(a) tax was assessed in the prior tax year. A 

disqualified person who engages in a prohibited transaction 

must file a separate Form 5330 to report the excise tax due 

under section 4975 for each tax year.

Line 2, columns (d) and (e). The “amount involved in a 

prohibited transaction” means the greater of the amount of 

money and the fair market value (FMV) of the other property 

given, or the amount of money and the FMV of the other 

property received. However, for services described in 

sections 4975(d)(2) and (10), the amount involved only 

applies to excess compensation. For purposes of

section 4975(a), FMV must be determined as of the date on 

which the prohibited transaction occurs. If the use of money 

or other property is involved, the amount involved is the 

greater of the amount paid for the use or the FMV of the use 

for the period for which the money or other property is used. 

In addition, transactions involving the use of money or other 

property will be treated as giving rise to a prohibited 

transaction occurring on the date of the actual transaction, 

plus a new prohibited transaction on the first day of each 

succeeding tax year or portion of a succeeding tax year 

which is within the taxable period. The “taxable period” for 

this purpose is the period of time beginning with the date of 

the prohibited transaction and ending with the earliest of:

1. The date the correction is completed,

2. The date of the mailing of a notice of deficiency, or

3. The date on which the tax under section 4975(a) is 

assessed.

See the instructions for Schedule C, under Additional tax for 

failure to correct the prohibited transaction (section 4975(b)), 

for the definition of “correction.”

8 Instructions for Form 5330
Temporary Regulations section 141.4975-13 states 

that, until final regulations are written under section 

4975(f), the definitions of amount involved and 

correction found in Regulations section 53.4941(e)-1 will 

apply.

Failure to transmit participant contributions. For 

purposes of calculating the excise tax on a prohibited 

transaction where there is a failure to transmit participant 

contributions (elective deferrals) or amounts that would have 

otherwise been payable to the participant in cash, the 

amount involved is based on interest on those elective 

deferrals. See Rev. Rul. 2006-38.

Column (e). The initial tax on a prohibited transaction is 

15% of the amount involved in each prohibited transaction for 

each year or part of a year in the taxable period. Multiply the 

amount in column (d) by 15%.

Example. The example of a prohibited transaction below 

does not cover all types of prohibited transactions. For more 

examples, see Regulations section 53.4941(e)-1(b)(4).

A disqualified person borrows money from a plan in a 

prohibited transaction under section 4975. The FMV of the 

use of the money and the actual interest on the loan is $1,000 

per month (the actual interest is paid in this example). The 

loan was made on July 1, 2022 (date of transaction), and 

repaid on December 31, 2023 (date of correction). The 

disqualified person's tax year is the calendar year. On July 

31, 2024, the disqualified person files a delinquent Form 

5330 for the 2022 plan year (which in this case is the 

calendar year) and a timely Form 5330 for the 2023 plan year 

(which in this case is the calendar year). No notice of 

deficiency with respect to the tax imposed by section 4975(a) 

has been mailed to the disqualified person and no 

assessment of such excise tax has been made by the IRS 

before the time the disqualified person filed the Forms 5330.

Each prohibited transaction has its own separate taxable 

period that begins on the date the prohibited transaction 

occurred or is deemed to occur and ends on the date of the 

correction. The taxable period that begins on the date the 

loan occurs runs from July 1, 2022 (date of loan), through 

December 31, 2023 (date of correction). When a loan is a 

prohibited transaction, the loan is treated as giving rise to a 

prohibited transaction on the date the transaction occurs, and 

an additional prohibited transaction on the first day of each 

succeeding tax year (or portion of a tax year) within the 

taxable period that begins on the date the loan occurs. 

Therefore, in this example, there are two prohibited 

transactions, the first occurring on July 1, 2022, and ending 

CAUTION

!

on December 31, 2022, and the second occurring on 

January 1, 2023, and ending on December 31, 2023.

Section 4975(a) imposes a 15% excise tax on the amount 

involved for each tax year or part thereof in the taxable period 

of each prohibited transaction.

The Form 5330 for the year ending December 31, 

2022. The amount involved to be reported in Form 5330, 

Schedule C, line 2, column (d), for the 2022 plan year, is 

$6,000 (6 months x $1,000). The tax due is $900 ($6,000 x 

15%). (See Figure 1 above.) (Any interest and penalties 

imposed for the delinquent filing of Form 5330 and the 

delinquent payment of the excise tax for 2022 will be billed 

separately to the disqualified person.)

The Form 5330 for the year ending December 31, 

2023. The excise tax to be reported on the 2023 Form 5330 

would include both the prohibited transaction of July 1, 2022, 

with an amount involved of $6,000, resulting in a tax due of 

$900 ($6,000 x 15%), and the second prohibited transaction 

of January 1, 2023, with an amount involved of $12,000 (12 

months x $1,000), resulting in a tax due of $1,800 ($12,000 x 

15%). (See Figure 2, later.) The taxable period for the second 

prohibited transaction runs from January 1, 2023, through 

December 31, 2023 (date of correction). Because there are 

two prohibited transactions with taxable periods running 

during 2023, the section 4975(a) tax is due for the 2023 tax 

year for both prohibited transactions.

When a loan from a qualified plan that is a prohibited 

transaction spans successive tax years, constituting 

multiple prohibited transactions, and during those 

years the first tier prohibited transaction excise tax rate 

changes, the first tier excise tax liability for each prohibited 

transaction is the sum of the products resulting from 

multiplying the amount involved for each year in the taxable 

period for that prohibited transaction by the excise tax rate in 

effect at the beginning of that taxable period. For more 

information, see Rev. Rul. 2002-43, 2002-32 I.R.B. 85 at 

www.irs.gov/pub/irs-irbs/irb02-28.pdf. Unlike the previous 

example, the example in Rev. Rul. 2002-43 contains unpaid 

interest.

Additional tax for failure to correct the prohibited 

transaction (section 4975(b)). To avoid liability for 

additional taxes and penalties, and in some cases further 

initial taxes, a correction must be made within the taxable 

period. The term “correction” is defined as undoing the 

prohibited transaction to the extent possible, but in any case 

placing the plan in a financial position not worse than that in 

TIP

Figure 1. 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)

Transaction 

number

(b) Date of 

transaction 

(see 

instructions)

(c) Description of prohibited transaction

(d) Amount involved in prohibited 

transaction (see instructions)

(e) Initial tax on prohibited 

transaction (multiply each 

transaction in column (d) by the 

appropriate rate (see 

instructions))

(i) 7-1-22 Loan $6,000 $900

(ii)

(iii)

3 Add amounts in column (e). Enter here and on Part I, line 3a ................................. ▶ $900

Instructions for Form 5330 9
which it would be if the disqualified person were acting under 

the highest fiduciary standards.

If the prohibited transaction is not corrected within the 

taxable period, an additional tax equal to 100% of the amount 

involved will be imposed under section 4975(b). Any 

disqualified person who participated in the prohibited 

transaction (other than a fiduciary acting only as such) must 

pay this tax imposed by section 4975(b). Report the 

additional tax on Part I, Section A, line 3b.

Line 4. Check “No” if there has not been a correction of all of 

the prohibited transactions by the end of the tax year for 

which this Form 5330 is being filed. Attach a statement 

including item number from line 2a and description indicating 

when the correction will be made.

Line 5. If more than one disqualified person participated in 

the same prohibited transaction, list on this schedule the 

name, address, and SSN or EIN of each disqualified person, 

other than the disqualified person who files this return.

For all transactions, complete columns (a), (b), and (c). If 

the transaction has been corrected, complete columns (a) 

through (e). If additional space is needed, you may attach a 

statement fully explaining the correction and identifying 

persons involved in the prohibited transaction.

Prohibited transactions and investment advice. The 

prohibited transaction rules of section 4975(c) will not apply 

to any transaction in connection with investment advice if the 

investment advice provided by a fiduciary adviser is provided 

under an eligible investment advice arrangement.

For this purpose, an “eligible investment advice 

arrangement” is an arrangement that either:

• Provides that any fees, including any commission or other 

compensation, received by the fiduciary adviser for 

investment advice or with respect to the sale, holding, or 

acquisition of any security or other property for the 

investment of plan assets do not vary depending on the basis 

of any investment option selected; or

• Uses a computer model under an investment advice 

program, described in section 4975(f)(8)(C), in connection 

with investment advice provided by a fiduciary adviser to a 

participant or beneficiary.

Additionally, the eligible investment advice arrangement must 

meet the provisions of sections 4975(f)(8)(D), (E), (F), (G), 

(H), and (I).

For purposes of the statutory exemption on investment 

advice, a “fiduciary adviser” is defined in

section 4975(f)(8)(J).

Correcting certain prohibited transactions. Generally, 

if a disqualified person enters into a direct or indirect 

prohibited transaction, listed in (1) through (4) below, in 

connection with the acquisition, holding, or disposition of 

certain securities or commodities, and the transaction is 

corrected within the correction period, it will not be treated as 

a prohibited transaction and no tax will be assessed.

1. Sale or exchange, or leasing of any property between 

a plan and a disqualified person.

2. Lending of money or other extension of credit between 

a plan and a disqualified person.

3. Furnishing of goods, services, or facilities between a 

plan and a disqualified person.

4. Transfer to, or use by or for the benefit of, a disqualified 

person of income or assets of a plan.

However, if, at the time the transaction was entered into, 

the disqualified person knew or had reason to know that the 

transaction was prohibited, the transaction would be subject 

to the tax on prohibited transactions.

For purposes of section 4975(d)(23), the term “correct” 

means to:

• Undo the transaction to the extent possible and in all cases 

to make good to the plan or affected account any losses 

resulting from the transaction, and

• Restore to the plan or affected account any profits made 

through the use of assets of the plan.

The “correction period” is the 14-day period beginning on 

the date on which the disqualified person discovers or 

reasonably should have discovered that the transaction 

constitutes a prohibited transaction.

Schedule D. Tax on Failure To Meet 

Minimum Funding Standards

(Section 4971(a))

In the case of a single-employer plan, section 4971(a) 

imposes a 10% tax on the aggregate unpaid minimum 

required contributions for all plan years remaining unpaid as 

of the end of any plan year. In the case of a multiemployer 

plan, section 4971(a) imposes a 5% tax on the amount of the 

accumulated funding deficiency determined as of the end of 

the plan year.

If a plan fails to meet the funding requirements under 

section 412, the employer and all controlled group members 

will be subject to excise taxes under sections 4971(a) and 

(b).

Figure 2. Example for the Calendar 2023 Plan Year Used When Filing for the 2023 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)

Transaction 

number

(b) Date of 

transaction 

(see 

instructions)

(c) Description of prohibited transaction

(d) Amount involved in prohibited 

transaction (see instructions)

(e) Initial tax on prohibited 

transaction (multiply each 

transaction in column (d) by the 

appropriate rate (see 

instructions))

(i) 7-1-22 Loan $6,000 $900

(ii) 1-1-23 Loan $12,000 $1,800

(iii)

3 Add amounts in column (e). Enter here and on Part I, line 3a ................................ ▶ $2,700

10 Instructions for Form 5330
Except in the case of a multiemployer plan, all members of 

a controlled group are jointly and severally liable for this tax. 

A “controlled group” in this case means a controlled group of 

corporations under section 414(b), a group of trades or 

businesses under common control under section 414(c), an 

affiliated service group under section 414(m), and any other 

group treated as a single employer under section 414(o).

If the IRS determined at any time that your plan was a 

plan as defined on Schedule C, it will always remain 

subject to the excise tax on failure to meet minimum 

funding standards.

Line 1. Enter the amount (if any) of the aggregate unpaid 

minimum required contributions (or in the case of a 

multiemployer plan, an accumulated funding deficiency as 

defined in section 431(a) (or section 418B if a multiemployer 

plan in reorganization)).

Line 2. Multiply line 1 by the applicable tax rate shown below 

and enter the result.

• 10% for plans other than multiemployer plans.

• 5% for all multiemployer plans.

Additional tax for failure to correct. For single-employer 

plans, when an initial tax is imposed under section 4971(a) 

on any unpaid minimum required contribution and the unpaid 

minimum required contribution remains unpaid as of the 

close of the taxable period, an additional tax of 100% of the 

amount that remains unpaid is imposed under section 

4971(b).

For multiemployer plans, when an initial tax is imposed 

under section 4971(a)(2) on an accumulated funding 

deficiency and the accumulated funding deficiency is not 

corrected within the taxable period, an additional tax equal to 

100% of the accumulated funding deficiency, to the extent 

not corrected, is imposed under section 4971(b).

For this purpose, the “taxable period” is the period 

beginning with the end of the plan year where there is an 

unpaid minimum required contribution or an accumulated 

funding deficiency and ending on the earlier of:

• The date the notice of deficiency for the section 4971(a) 

excise tax is mailed, or

• The date the section 4971(a) excise tax is assessed.

Report the tax for failure to correct the unpaid minimum 

required contribution or the accumulated funding deficiency 

on Part I, Section B, line 8b.

Schedule E. Tax on Failure To Pay 

Liquidity Shortfall (Section 4971(f)(1))

If your plan has a liquidity shortfall for which an excise tax 

under section 4971(f)(1) is imposed for any quarter of the 

plan year, complete lines 1 through 4.

Line 1. Enter the amount of the liquidity shortfall(s) for each 

quarter of the plan year.

Line 2. Enter the amount of any contributions made to the 

plan by the due date of the required quarterly installment(s) 

that partially corrected the liquidity shortfall(s) reported on 

line 1.

Line 3. Enter the net amount of the liquidity shortfall. 

(Subtract line 2 from line 1.)

Additional tax for failure to correct liquidity shortfall. 

If the plan has a liquidity shortfall as of the close of any 

quarter and as of the close of the following 4 quarters, an 

CAUTION

!

additional tax will be imposed under section 4971(f)(2) equal 

to the amount on which tax was imposed by

section 4971(f)(1) for such quarter. Report the additional tax 

on Part I, Section B, line 9b.

Schedule F. Tax on Multiemployer 

Plans in Endangered or Critical 

Status (Sections

4971(g)(3) and 4971(g)(4))

For years beginning after 2007, section 4971(g) imposes an 

excise tax on employers who contribute to multiemployer 

plans for failure to comply with a funding improvement or 

rehabilitation plan, failure to meet requirements for plans in 

endangered or critical status, or failure to adopt a 

rehabilitation plan. See the instructions for line 10a, earlier.

Line 1. Under section 4971(g)(3), a multiemployer plan that 

is in seriously endangered status when it fails to meet its 

applicable benchmarks by the end of the funding 

improvement period will be treated as having an accumulated 

funding deficiency for the last plan year in such period and 

each succeeding year until the funding benchmarks are met.

Similarly, a plan that is in critical status and either fails to 

meet the requirements of section 432 by the end of the 

rehabilitation period, or has received certification under 

section 432(b)(3)(A)(ii) for 3 consecutive plan years that the 

plan is not making the scheduled progress in meeting its 

requirements under the rehabilitation plan, will be treated as 

having an accumulated funding deficiency for the last plan 

year in such period and each succeeding plan year until the 

funding requirements are met.

In both cases, the accumulated funding deficiency is an 

amount equal to the greater of the amount of the 

contributions necessary to meet the benchmarks or 

requirements, or the amount of the accumulated funding 

deficiency without regard to this rule. The existence of an 

accumulated funding deficiency triggers the initial 5% excise 

tax under section 4971(a).

A plan is in “endangered status” if either of the following 

occurs.

• The plan's actuary timely certifies that the plan is not in 

critical status for that plan year and at the beginning of that 

plan year the plan's funded percentage for the plan year is 

less than 80%.

• The plan has an accumulated funding deficiency for the 

plan year or is projected to have such an accumulated 

funding deficiency for any of the 6 succeeding plan years, 

taking into account any extension of amortization periods 

under section 431(d).

A plan is in “critical status” if it is determined by the 

multiemployer plan's actuary that one of the four formulas in 

section 432(b)(2) is met for the applicable plan year.

All or part of this excise tax may be waived due to 

reasonable cause.

Line 2. Under section 4971(g)(4), the plan sponsor of a 

multiemployer plan in critical status, as defined above, will be 

liable for an excise tax for failure to adopt a rehabilitation plan 

within the time prescribed under section 432. The tax is equal 

to the greater of:

• The amount of tax imposed under section 4971(a)(2); or

• An amount equal to $1,100, multiplied by the number of 

days in the tax year which are included in the period that 

begins on the first day following the close of the 240-day 

Instructions for Form 5330 11
period that a multiemployer plan has to adopt a rehabilitation 

plan once it has entered critical status and that ends on the 

day the rehabilitation plan is adopted. Section 432(e)(1)(A) 

allows the plan sponsor to adopt a rehabilitation plan within 

the 240-day period following the required date for the 

actuarial certification of critical status in section 432(b)(3)(A).

Liability for this tax is imposed on each plan sponsor. This 

excise tax may not be waived.

Follow the instructions as defined above for counting 

days and completing line 2b.

Complete line 2b as instructed below. Enter the number of 

days during the tax year that are included in the period 

beginning on the first day following the close of the 240-day 

period and ending on the day the rehabilitation plan is 

adopted.

Schedule G. Tax on Excess Fringe 

Benefits (Section 4977)

If you made an election to be taxed under section 4977 to 

continue your nontaxable fringe benefit policy that was in 

existence on or after January 1, 1984, check “Yes” on line 1 

and complete lines 2 through 4.

Line 3. Excess fringe benefits are calculated by subtracting 

1% of the aggregate compensation paid by you to your 

employees during the calendar year that was includible in 

their gross income from the aggregate value of the 

nontaxable fringe benefits under sections 132(a)(1) and (2).

Schedule H. Tax on Excess 

Contributions to Certain Plans 

(Section 4979)

Any employer who maintains a plan described in section 

401(a), 403(a), 403(b), 408(k), or 501(c)(18) may be subject 

to an excise tax on excess aggregate contributions made on 

behalf of highly compensated employees. The employer may 

also be subject to an excise tax on excess contributions to a 

cash or deferred arrangement connected with the plan.

The tax is on the excess contributions and the excess 

aggregate contributions made to or on behalf of the highly 

compensated employees as defined in section 414(q).

Generally, a “highly compensated employee” is an 

employee who:

1. Was a 5% owner at any time during the year or the 

preceding year; or

2. For the preceding year, had compensation from the 

employer in excess of a dollar amount for the year ($150,000 

for 2023) and, if the employer so elects, was in the top paid 

group for the preceding year.

An employee is in the “top-paid group” for any year if the 

employee is in the group consisting of the top 20% of 

employees when ranked on the basis of compensation paid. 

An employee (who is not a 5% owner) who has 

compensation in excess of $150,000 is not a highly 

compensated employee if the employer elects the top-paid 

group limitation and the employee is not a member of the 

top-paid group.

The excess contributions subject to the section 4979 

excise tax are equal to the amount by which employer 

contributions actually paid over to the trust exceed the 

CAUTION

!

employer contributions that could have been made without 

violating the special nondiscrimination requirements of 

section 401(k)(3) or section 408(k)(6) in the instance of 

certain SEPs.

The excess aggregate contributions subject to the section 

4979 excise tax are equal to the amount by which the 

aggregate matching contributions of the employer and the 

employee contributions (and any qualified nonelective 

contribution or elective contribution taken into account in 

computing the contribution percentage under section 

401(m)) actually made on behalf of the highly compensated 

employees for each plan year exceed the maximum amount 

of contributions permitted in the contribution percentage 

computation under section 401(m)(2)(A).

However, there is no excise tax liability if the excess 

contributions or the excess aggregate contributions and any 

income earned on the contributions are distributed (or, if 

forfeitable, forfeited) to the participants for whom the excess 

contributions were made within 21/2 months after the end of 

the plan year.

Schedule I. Tax on Reversion of 

Qualified Plan Assets to an Employer 

(Section 4980)

Section 4980 imposes an excise tax on an employer 

reversion of qualified plan assets to an employer. Generally, 

the tax is 20% of the amount of the employer reversion. The 

excise tax rate increases to 50% if the employer does not 

establish or maintain a qualified replacement plan following 

the plan termination or provide certain pro-rata benefit 

increases in connection with the plan termination. See 

section 4980(d)(1)(A) or (B) for more information.

An “employer reversion” is the amount of cash and the 

FMV of property received, directly or indirectly, by an 

employer from a qualified plan. For exceptions to this 

definition, see section 4980(c)(2)(B) and section 4980(c)(3).

A “qualified plan” is:

• Any plan meeting the requirements of section 401(a) or 

403(a), other than a plan maintained by an employer if that 

employer has at all times been exempt from federal income 

tax; or

• A governmental plan within the meaning of section 414(d).

Terminated defined benefit plan. If a defined benefit 

plan is terminated, and an amount in excess of 25% of the 

maximum amount otherwise available for reversion is 

transferred from the terminating defined benefit plan to a 

defined contribution plan, the amount transferred is not 

treated as an employer reversion for purposes of

section 4980. However, the amount the employer receives is 

subject to the 20% excise tax. For additional information, see 

Rev. Rul. 2003-85, 2003-32 I.R.B. 291 at www.irs.gov/irb/

2003-32_IRB/ar11.html.

Lines 1 through 4. Enter the date of reversion on line 1. 

Enter the reversion amount on line 2a and the applicable 

excise tax rate on line 2b. If you use a tax percentage other 

than 50% on line 2b, explain on line 4 why you qualify to use 

a rate other than 50%.

12 Instructions for Form 5330
Schedule J. Tax on Failure To Provide 

Notice of Significant Reduction in 

Future Accruals (Section 4980F)

Section 204(h) notice. Section 4980F imposes an excise 

tax on an employer (or, in the case of a multiemployer plan, 

the plan) for failure to give section 204(h) notice of plan 

amendments that provide for a significant reduction in the 

rate of future benefit accrual or the elimination or significant 

reduction of an early retirement benefit or retirement-type 

subsidy. The tax is $100 per day per each applicable 

individual and each employee organization representing 

participants who are applicable individuals for each day of 

the noncompliance period. This notice is called a “section 

204(h) notice” because section 204(h) of ERISA has parallel 

notice requirements.

An “applicable individual” is a participant in the plan, or an 

alternate payee of a participant under a qualified domestic 

relations order, whose rate of future benefit accrual (or early 

retirement benefit or retirement-type subsidy) under the plan 

may reasonably be expected to be significantly reduced by a 

plan amendment. (For plan years beginning after December 

31, 2007, the requirement to give 204(h) notice was extended 

to an employer who has an obligation to contribute to a 

multiemployer plan.)

Whether a participant, alternate payee, or an employer (as 

described in the above paragraph) is an applicable individual 

is determined on a typical business day that is reasonably 

approximate to the time the section 204(h) notice is provided 

(or on the latest date for providing section 204(h) notice, if 

earlier), based on all relevant facts and circumstances. For 

more information in determining whether an individual is a 

participant or alternate payee, see Regulations

section 54.4980F-1, Q&A 10.

The “noncompliance period” is the period beginning on 

the date the failure first occurs and ending on the date the 

notice of failure is provided or the failure is corrected.

Exceptions. The section 4980F excise tax will not be 

imposed for a failure during any period in which the following 

occurs.

1. Any person subject to liability for the tax did not know 

that the failure existed and exercised reasonable diligence to 

meet the notice requirement. A person is considered to have 

exercised reasonable diligence but did not know the failure 

existed only if:

a. The responsible person exercised reasonable 

diligence in attempting to deliver section 204(h) notice to 

applicable individuals by the latest date permitted; or

b. At the latest date permitted for delivery of section 

204(h) notice, the person reasonably believed that section 

204(h) notice was actually delivered to each applicable 

individual by that date.

2. Any person subject to liability for the tax exercised 

reasonable diligence to meet the notice requirement and 

corrects the failure within 30 days after the employer (or other 

person responsible for the tax) knew, or exercising 

reasonable diligence would have known, that the failure 

existed.

Generally, section 204(h) notice must be provided at least 

45 days before the effective date of the section 204(h) 

amendment. For exceptions to this rule, see Regulations 

section 54.4980F-1, Q&A 9.

If the person subject to liability for the excise tax exercised 

reasonable diligence to meet the notice requirement, the total 

excise tax imposed during a tax year of the employer will not 

exceed $500,000. Furthermore, in the case of a failure due to 

reasonable cause and not to willful neglect, the Secretary of 

the Treasury is authorized to waive the excise tax to the 

extent that the payment of the tax would be excessive relative 

to the failure involved. See Rev. Proc. 2013-4, 2013-1 I.R.B. 

123, as revised by subsequent documents, available at 

www.irs.gov/irb/2013-01_IRB/ar09.html, for procedures to 

follow in applying for a waiver of part or all of the excise tax 

due to reasonable cause.

Line 4. A failure occurs on any day that any applicable 

individual (AI) is not provided section 204(h) notice.

Example. There are 1,000 AIs. The plan administrator 

fails to give section 204(h) notice to 100 AIs for 60 days, and 

to 50 of those AIs for an additional 30 days. In this case, there 

are 7,500 failures ((100 AIs x 60 days) + (50 AIs x 30 days) = 

7,500).

Schedule K. Tax on Prohibited Tax 

Shelter Transactions (Section 4965)

Section 4965 provides that an entity manager of a tax-exempt 

organization may be subject to an excise tax on prohibited 

tax shelter transactions under section 4965. In the case of a 

plan entity, an entity manager is any person who approves or 

otherwise causes the tax-exempt entity to be a party to a 

prohibited tax shelter transaction. The excise tax is $20,000 

and is assessed for each approval or other act causing the 

organization to be a party to the prohibited tax shelter 

transaction.

Schedule L. Tax on Failure of a 

Cooperative and Small Employer 

Charity (CSEC) Plan Sponsor To 

Adopt Funding Restoration Plan

(Section 4971(h))

A CSEC plan is:

• a defined benefit plan (other than a multiemployer plan) 

including an eligible cooperative plan (as defined in section 

104 of the PPA ‘06);

• a plan that, as of June 25, 2010, was maintained by more 

than one section 501(c)(3) organization;

• a plan that, as of June 25, 2010, was maintained by a 

single employer that was a 501(c)(3) organization chartered 

under Part B, Subtitle II, Title 36 of the U.S.C., whose primary 

exempt purpose is to provide services with respect to 

children, and which has employees in at least 40 states; or

• any plan that, as of January 1, 2000, was maintained by an 

employer that is a 501(c)(3) organization, has been in 

existence since at least 1938, conducts medical research 

directly or indirectly through grant making, and has a primary 

exempt purpose to provide services with respect to mothers 

and children (section 414(y)(1), amended by section 3609 of 

the Coronavirus Aid, Relief, and Economic Security (CARES) 

Act (P.L. 116-136)).

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 

actuary that the plan is in funding restoration status for a plan 

year. Section 4971(h) imposes an excise tax on the CSEC 

plan sponsor for the plan in funding restoration status for the 

Instructions for Form 5330 13
failure to adopt a funding restoration plan within the time 

prescribed under section 433(j)(3).

A CSEC plan is treated as being in funding restoration 

status for a plan year if the plan's funded percentage as of 

the beginning of such plan year is less than 80%. Funded 

percentage means the ratio that the value of plan assets 

bears to the plan's funding liability.

Line 1. Under section 4971(h)(2), the excise tax amount with 

respect to any CSEC plan sponsor for any tax year should be 

the amount equal to $100 multiplied by the number of days 

during the tax year that are included in the period beginning 

on the day following the close of the 180-day period 

described in section 433(j)(3) and ending on the day on 

which the funding restoration plan is adopted.

Line 2. Calculate the excise tax amount by multiplying days 

entered on line 1 by $100. Enter the excise tax amount on 

line 2 and on Part I, line 10d.

All or part of this excise tax may be waived if the IRS 

determines that a failure is due to reasonable cause and not 

to willful neglect.

Privacy Act and Paperwork Reduction Act Notice. We 

ask for the information on this form to carry out the Internal 

Revenue laws of the United States. This form is required to 

be filed under sections 4965, 4971, 4972, 4973, 4975, 4976, 

4977, 4978, 4979, 4979A, 4980, and 4980F of the Internal 

Revenue Code. Section 6109 requires you to provide your 

identifying number. If you fail to provide this information in a 

timely manner, you may be liable for penalties and interest. 

Routine uses of this information include giving it to the 

Department of Justice for civil and criminal litigation, and to 

cities, states, and the District of Columbia for use in 

administering their tax laws. We may also disclose this 

information to federal and state or local agencies to enforce 

federal nontax criminal laws and to combat terrorism.

You are not required to provide the information requested 

on a form that is subject to the Paperwork Reduction Act 

unless the form displays a valid OMB control number. Books 

or records relating to a form or its instructions must be 

retained as long as their contents may become material in the 

administration of any Internal Revenue law. Generally, tax 

returns and return information are confidential, as required by 

section 6103.

The time needed to complete and file this form will vary 

depending on individual circumstances. The estimated 

average time is:

Recordkeeping........... 30 hr., 22 min.

Learning about the law or 

the form ................ 15 hr., 45 min.

Preparing and sending the 

form to the IRS ........... 18 hr., 08 min.

If you have comments concerning the accuracy of these 

time estimates or suggestions for making this form simpler, 

we would be happy to hear from you. You can send us 

comments from IRS.gov/FormsComments. Or you can write 

to the Internal Revenue Service, Tax Forms and Publications 

Division, 1111 Constitution Ave. NW, IR-6526, Washington, 

DC 20224. Do not send Form 5330 to this address. Instead, 

see Where To File, earlier.

14 Instructions for Form 5330
Index

A

Amended return 3, 6

Amount involved 5

C

Claim for refund 3

D

Disqualified benefit, funded welfare 

plans 4

Disqualified person 10

Due dates 3

E

Eligible investment advice 

arrangement 10

Employer reversion 12

Entity manager 6

ESOP 5

Prohibited allocations 5

ESOP dispositions 5

Excess contributions:

403(b)(7) plans 7

Section 4979 12

Excise tax due dates 3, 5

Extension 2

F

Form 5558 2

Funded welfare plans 4

H

How to file 2

I

Interest 3

Investment advice 10

L

Late filing 3

Interest 3

Penalty 3

Late payment 3

Liquidity shortfall:

Additional tax 11

Listed transaction 6

M

Minimum funding standards, 

failure 10

N

Nonallocation period 5

Nondeductible employer 

contributions 7

Exception, defined benefit plan 7

Exception, defined contribution 

plan 7

Nondeductible contributions 7

Qualified plan 7

Notice of significant reduction in 

future accruals 13

Applicable individual 13

P

Payment of taxes 6

Penalty 3

Late payment 3

Private delivery services 3

Prohibited allocation:

Disqualified person 6

ESOP 5

Nonallocation period 5

Synthetic equity 5

Worker-owned cooperative 5

Prohibited reportable transaction 6

Prohibited tax shelter transaction 6

Entity manager 6

Prohibited transaction 7

Correcting 10

Correction period 10

Definition 8

Disqualified person 8

Exemptions 8

Failure to correct 9

Investment advice 10

Purpose of form 1

Q

Qualified ESOP securities 5

R

Reversion of qualified plan 

assets 12

Qualified plan 12

Terminated defined benefit plan 12

S

Section 403(b) plan 7

Section 4965 6, 13

Section 4971(a) 10

Section 4971(b) 10

Section 4971(f) 11

Section 4971(g) 11

Section 4971(g)(2) 6

Section 4971(g)(3) 11

Section 4971(g)(4) 11

Section 4971(h) 13

Section 4972 7

Section 4973(a)(3) 7

Section 4975 7

Section 4976 4

Section 4977 12

Section 4979 12

Section 4979A 5

Section 4980 12

Section 4980F 13

Summary of taxes due 4

Synthetic equity 5

Amount involved 5

T

Table of due dates 3

W

When to file 2

Where to file 2

Who must file 1

Worker-owned cooperative 5

15