Do You Have to File Form 5500-EZ for a Solo 401(k)? (w/Examples) + FAQs

Quick Answer

No — not every Solo 401(k) owner has to file. For the 2025 plan year (returns due July 31, 2026), you must file Form 5500-EZ only if your total plan assets topped $250,000 on December 31, 2025, or if you closed the plan in 2025.

Most new Solo 401(k) owners file nothing for years, then suddenly owe a return the year their account crosses a quarter-million dollars — and many never notice until a penalty notice arrives. The form is not a tax. It is an information return that tells the IRS your one-participant plan still exists and is being run by the rules.

The stakes are real and the deadline is fixed. A missed Form 5500-EZ carries a late penalty of $250 per day, up to $150,000 per return under IRC Section 6652(e), a figure raised sharply by the SECURE Act of 2019. With roughly 40 million Americans doing some self-employed work, the pool of plans quietly approaching the filing line keeps growing every year.

This article reflects federal IRS rules as of June 2026 and covers the 2025 plan year (2026 filing season). Form 5500-EZ is a federal filing with no separate state version; state rules are noted where relevant. Tax law changes — confirm current figures before you file. This is educational, not personalized advice; see a CPA or ERISA attorney for your specific plan.

Here is what you will learn:

🎯 The exact $250,000 test that decides whether you file at all
📅 The July 31 deadline, the Form 5558 extension, and what missing it costs
🧮 Three fully worked dollar examples that show when the rule kicks in
🛟 The IRS penalty relief program that cuts a $150,000 fine to as little as $500
⚰️ Why closing your plan forces a final return even with a tiny balance

What Form 5500-EZ Actually Is

Form 5500-EZ is the Annual Return of A One-Participant (Owners/Partners and Their Spouses) Retirement Plan. In plain words, it is a short information report you send the IRS once a year to confirm your Solo 401(k) still exists, how much money is in it, and that it is being run within the rules. It is not a tax bill — you owe nothing with it, and the money inside your plan keeps growing tax-deferred.

The “EZ” version exists because one-participant plans are simpler than big company 401(k)s. A Solo 401(k) covers only a business owner (and a spouse, or business partners and their spouses) with no common-law employees. Because there are no outside workers to protect, your plan is not subject to Title I of ERISA, the federal law that polices employer plans. That single fact is why you file the simpler 5500-EZ instead of the full Form 5500.

Skipping the form when it is required does not just risk a fine. It can flag your plan for an IRS review and, in a worst case, threaten the tax-favored status that makes the plan worth having. The fix is almost always cheaper than the problem: file the short form on time, keep proof, and move on. If you are unsure whether your plan even qualifies as one-participant, that is the moment to call a retirement plan specialist before you file.

The $250,000 Test — The Rule That Decides Everything

The whole filing question turns on one number. For any plan year, you must file Form 5500-EZ if the total value of all your one-participant plan assets is more than $250,000 on the last day of the plan year — usually December 31. If you are at or below $250,000 and the plan is still open, you file nothing.

Here is the nuance most owners miss: the test counts all one-participant plans you sponsor combined, not each account alone. If you have a Solo 401(k) and a separate one-participant defined benefit plan, you add them together. The IRS spells this out in its guidance for plans over $250,000. The consequence of ignoring this is a missed filing you did not know you owed.

A common misconception is that the $250,000 is a contribution limit or a “rich person” threshold. It is neither — it is purely a reporting trigger tied to year-end value, including growth, rollovers, and real estate held inside the plan. What you should do: every January, total the December 31 value of all one-participant plans. If the combined figure clears $250,000, mark July 31 on your calendar. If you crossed it because you rolled in an old 401(k), you still file — rollovers count.

Why the Year-End Value, Not the Average

The IRS looks at the value on the last day of the plan year, not an average or a starting balance. A plan that sat at $240,000 most of the year but closed December 31 at $251,000 must file. The reverse is also true: a plan that peaked at $300,000 in July but dropped to $245,000 by year-end does not have to file for that year. The consequence of using the wrong date is filing when you need not — or worse, skipping when you must. Pull your December 31 statement, not a mid-year one, and base the decision on that single figure.

Which Situation Applies to You?

The answer depends entirely on your plan’s size and status. Find your row below, then read the matching section.

New plan, balance under $250,000, still open → You file nothing this year. Track the year-end value annually.
Balance over $250,000 on December 31 → You file Form 5500-EZ by July 31 of the next year.
You closed or terminated the plan in 2025 → You file a final Form 5500-EZ, even if the balance is small.
You sponsor more than one one-participant plan → Combine the balances for the $250,000 test, and file one 5500-EZ per plan.
You missed a past filing → Skip the regular path; use the IRS penalty relief program below.

When You DON’T Have to File

Plenty of Solo 401(k) owners owe nothing, and that is by design. If your plan is open and worth $250,000 or less on the last day of the plan year, no Form 5500-EZ is due. This is the single biggest source of relief — and confusion — for newer plans, which often spend three to six years below the line.

You also do not file in the very first year if the plan is brand new and small. A self-employed worker who opens a Solo 401(k) and contributes $30,000 has no filing obligation that year. The plan can run for years with zero forms, as long as it stays under the threshold and stays open. The consequence of over-filing is minor but real: you create a filing history the IRS expects you to continue.

One trap hides here. Once you file because you crossed $250,000, dropping back below the line later does not always end your duty — and when you finally close the plan, a final return is required regardless of balance. So “I’m under $250,000” answers this year’s question, not every future year’s. What to do: re-run the year-end test every January rather than assuming last year’s answer still holds.

When You MUST File

Two triggers force a filing. The first is the $250,000 year-end threshold described above. The second is terminating the plan — closing it and distributing or rolling out all the assets. A termination always requires a final Form 5500-EZ, even if the balance is far below $250,000, because the IRS needs a record that the plan ended cleanly.

The reason for the termination rule is simple: the IRS tracks plans from birth to death. If a plan just vanishes from its records with no final return, that is the kind of gap that invites a notice. The consequence of skipping the final filing is the same brutal penalty schedule — $250 per day, up to $150,000 — applied to a plan you thought you had already left behind.

Here is the step that catches people: you must check the final return box and bring the account to a zero balance in the same plan year you report as final. A common misconception is that you can close the account in January and file the final form for the prior year — but the final-year value must reflect the wind-down. What to do: distribute or roll over every dollar, confirm the custodian shows $0, then file the final 5500-EZ by July 31 of the following year.

Three Worked Examples (with the Math)

Numbers make the rule concrete. Each example below uses the 2025 plan year, with the December 31, 2025 value driving the decision.

Example 1 — Maria, the freelance designer (no filing). Maria opened her Solo 401(k) in 2023. She contributed $28,000 in 2025. With market growth, her December 31, 2025 balance is $214,500. Test: $214,500 is under $250,000, plan still open → Maria files nothing for 2025. She simply notes the figure and re-checks next January.

Example 2 — David, the consultant who crossed the line (must file). David’s Solo 401(k) sat at $238,000 entering 2025. He contributed $46,000, and growth added about $19,000, ending the year at $303,000. Test: $303,000 is over $250,000 → David must file Form 5500-EZ by July 31, 2026. This is his first-ever filing, triggered purely by crossing the threshold. He owes no tax with the form — just the report.

Example 3 — Priya, who closed her plan (final filing despite small balance). Priya wound down her business and terminated her Solo 401(k) in 2025, rolling the entire $61,000 into an IRA and leaving a $0 balance. The amount is well under $250,000, but termination forces a final return. Priya files a final Form 5500-EZ for 2025 by July 31, 2026, and checks the final return box.

Scenario Tables

These three tables map the most common situations to what they require.

Plan Still Open

Year-End Value on Dec 31, 2025	What You Must Do
$250,000 or less	File nothing; record the value and re-test next January
More than $250,000	File Form 5500-EZ by July 31, 2026
First-year plan, under $250,000	File nothing; the plan can run for years form-free

Closing or Changing the Plan

Plan Event in 2025	Filing Result
Terminated the plan, any balance	File a final Form 5500-EZ; check the final-return box
Dropped below $250,000 but still open	No filing required for 2025 (unless terminated)
Merged into another plan	File a final return for the closing plan

You Missed a Past Deadline

Your Situation	Best Move
Late, no IRS notice yet	Use Rev. Proc. 2015-32 relief — $500 per return, $1,500 cap
Already got a CP 283 notice	That year is ineligible for the relief program; respond directly
Reasonable cause exists	Attach a signed reasonable-cause statement instead

How to File Form 5500-EZ — Step by Step

Filing is short, but the path matters. You have two legal routes: paper to the IRS, or electronic through the Department of Labor’s EFAST2 system. Note one trap up front — you cannot use the regular IRS e-File system (the one for income taxes) for this form.

Gather your numbers. You need the plan’s beginning-of-year and end-of-year asset values, contributions, and distributions for the plan year.
Pick your filing method. File electronically through EFAST2 (the IRS encourages this) or mail the paper Form 5500-EZ to the IRS.
Complete the identifying info. Enter the plan name, the three-digit plan number (usually 001), the sponsor’s EIN, and the plan year dates.
Report the financials. Fill in total plan assets, contributions, and any distributions for the year.
Check the right boxes. Mark the first return, final return, or amended return box if any apply.
Sign and submit. Electronic filings need a PIN and the plan administrator’s signature; paper filings need a wet signature.

The deadline is the last day of the seventh month after the plan year ends — July 31, 2026, for a calendar-year 2025 plan. If you need more time, mail Form 5558 before July 31 for an automatic 2.5-month extension to October 15, 2026. No IRS approval is needed; filing the form is enough. There is no e-file option for Form 5558, so mail it and keep proof.

Cost and Timing

Filing it yourself is free through EFAST2 or by mail, and a straightforward return takes most owners under an hour once the numbers are in hand. If your plan holds complex assets — real estate, notes, or an LLC — a third-party administrator or CPA typically charges a few hundred dollars to prepare it. That cost is small next to the $150,000 maximum penalty, so when in doubt about a complex plan, pay for the help.

What Happens If You File Late

Late filing is where Solo 401(k) owners get hurt. Without relief, the penalty is $250 per day, capped at $150,000 per return, under IRC Section 6652(e). The SECURE Act of 2019 raised these numbers, so older online articles understate the risk. Because each plan year is a separate return, multiple missed years can stack into multiple penalties.

The good news is the IRS built a rescue ramp. Under Revenue Procedure 2015-32, eligible one-participant plans can file all delinquent returns for $500 per return, capped at $1,500 per plan — a fraction of the standard fine. The catch: you must act before the IRS sends you a CP 283 penalty notice for that year. Once that notice arrives, the year is locked out of the program.

To use the relief program: prepare a paper Form 5500-EZ for each missed year, check Box D for the relief program, attach Form 14704 on top, include a check to the “United States Treasury,” and mail it all to the Ogden, Utah service center. Electronically filed delinquent returns are not eligible. If you have a strong excuse, you may instead attach a signed reasonable-cause statement — but if the IRS rejects it, you lose access to the program.

Federal vs. State

Form 5500-EZ is a federal filing only. There is no separate state version of the 5500-EZ, and states do not run their own one-participant plan reporting program that mirrors it. A few states layer on their own rules for employer plans with workers, but a true Solo 401(k) covering only an owner and spouse generally has no state filing tied to this form. Check your own state’s Department of Revenue only if your plan holds in-state real estate or business interests that raise separate questions.

Mistakes to Avoid

Each error below carries a specific cost.

Not filing after crossing $250,000. The penalty runs $250 a day, up to $150,000 per return.
Using the wrong year-end date. Basing the test on a mid-year peak instead of December 31 leads to filing when you should not — or skipping when you must.
Forgetting the final return on termination. Closing the plan without a final 5500-EZ leaves a gap that triggers notices and penalties.
Filing delinquent returns electronically. EFAST2 submissions are ineligible for the $500 relief program, so you lose the discount.
Waiting past the CP 283 notice. Once the IRS bills you, that year can no longer use Rev. Proc. 2015-32 relief.
Counting only one plan. Failing to combine multiple one-participant plans for the $250,000 test causes a missed filing.
Missing Form 5558’s mail-only rule. Trying to e-file the extension request fails, leaving you exposed to the full penalty.
Tossing records early. ERISA Section 107 requires keeping records six years after each filing; losing them weakens any defense in an audit.

Do’s and Don’ts

Do’s

Do total your December 31 value every January — because the year-end figure is the only number that decides your filing.
Do combine all one-participant plans — because the $250,000 test looks at the total, not each account.
Do file a final return when you close the plan — because termination triggers it regardless of balance.
Do mail Form 5558 before July 31 if you need time — because it buys an automatic extension to October 15.
Do keep filed copies six years — because ERISA requires it and audits look back.

Don’ts

Don’t assume the form is a tax — because you owe nothing with it; it is information only.
Don’t use IRS e-File for the 5500-EZ — because only paper or EFAST2 is accepted.
Don’t ignore an old missed year — because the $500 relief program can erase a $150,000 exposure.
Don’t e-file a delinquent return seeking relief — because that makes it ineligible for the program.
Don’t rely on last year’s “no-file” answer — because crossing the threshold or closing the plan changes it.

Pros and Cons of the Solo 401(k) Filing Rule

Pros

No filing under $250,000 — because small plans stay paperwork-free for years.
The form is free to file — because EFAST2 and paper cost nothing to submit.
A generous relief program exists — because late filers can cap costs at $1,500 per plan.
No tax due with the return — because it is purely informational.
A clear, single threshold — because one number ($250,000) makes the test easy to apply.

Cons

The penalty is severe — because a missed return runs up to $150,000.
Termination always triggers a return — because even a tiny closed plan must file.
The threshold counts growth and rollovers — because plans cross it without new contributions.
No income-tax e-File route — because the separate EFAST2 system trips up first-timers.
Relief vanishes after a CP 283 notice — because timing the fix matters as much as making it.

What to Do Next

Take these steps in order.

Pull your December 31, 2025 statement and total all one-participant plan assets.
Apply the test: over $250,000, or did you close the plan in 2025? If yes, you file.
Choose your method — EFAST2 electronic or paper Form 5500-EZ.
Mark July 31, 2026, or mail Form 5558 before then for an extension.
If you missed a past year, prepare a paper return under Rev. Proc. 2015-32 with Form 14704 before any notice arrives.
Call a CPA or ERISA attorney if your plan holds real estate, has multiple plans, or already received an IRS notice.

FAQs

Do all Solo 401(k) owners have to file Form 5500-EZ? No. For the 2025 plan year, you file only if total plan assets exceeded $250,000 on December 31, 2025, or you terminated the plan that year. Plans at or below the threshold and still open file nothing.

What is the Form 5500-EZ deadline for 2025 plans? July 31, 2026. The due date is the last day of the seventh month after the plan year ends. Calendar-year plans file by July 31 of the following year, or October 15 with a timely Form 5558 extension.

How much is the penalty for filing late? Up to $150,000 per return — $250 per day under IRC Section 6652(e), as raised by the SECURE Act of 2019. A relief program can cut this to $500 per return, capped at $1,500 per plan.

Do I have to file when I close my Solo 401(k)? Yes. Terminating the plan always requires a final Form 5500-EZ, even if the balance is under $250,000. Check the final-return box and bring the account to a $0 balance.

Does the $250,000 threshold count rollovers and growth? Yes. The test uses the total year-end value, including contributions, investment growth, and rolled-in funds. You can cross the line without making a single new contribution.

Can I file Form 5500-EZ through regular IRS e-File? No. Use the Department of Labor’s EFAST2 system or mail the paper form. The income-tax e-File system does not accept Form 5500-EZ.

What if I have two one-participant plans? Combine them. The $250,000 test applies to all one-participant plans you sponsor together. If the combined total exceeds $250,000, file a separate Form 5500-EZ for each plan.

How do I get more time to file? File Form 5558. Mail it before July 31 for an automatic 2.5-month extension to October 15. No IRS approval is needed, and there is no e-file option for the extension request.

Is there a state version of Form 5500-EZ? No. Form 5500-EZ is a federal-only filing. States do not run a separate one-participant plan report that mirrors it, though state rules can apply to plans that cover employees.

I missed several years — what should I do? Use Rev. Proc. 2015-32. File paper returns for each missed year with Form 14704 and a $500-per-return fee, capped at $1,500. You must act before the IRS sends a CP 283 notice.

Does Form 5500-EZ make me pay tax? No. It is an information return, not a tax. You owe nothing with it; the money in your plan keeps growing tax-deferred.

How long must I keep my filing records? Six years. ERISA Section 107 requires keeping records for six years after each Form 5500-EZ is filed. Many advisors keep them until all benefits are paid out.

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