On July 31, 2015, President Obama signed the "Surface Transportation and Veterans Health Care Choice Improvement Act of 2015" (P.L. 114-41) (the "Act"). The Act primarily served to extend the Highway Trust Fund and various related measures, but it also included a number of unrelated provisions, one of which was a revision in the rules relating to extensions for filing Forms 5500. (There were also changes made to the due dates of various other tax returns, but those changes are beyond the scope of this Alert; you may contact the author if you would like additional information regarding those changes as well.)
Currently, employee benefit plans are required to file an Annual Return/Report on Form 5500 – or its related short form, the Form 5500-SF – within seven months after the end of a plan year (July 31 for calendar-year plans). An automatic extension is available, upon timely request, for up to another two and one-half months (October 15 for the calendar-year plan). In addition, if certain requirements are met, an extension of the due date for the plan sponsor's income tax return could result in an automatic extension of the Form 5500 deadline as well, but not beyond the hypothetical due date including the maximum permitted two and one-half-month extension (i.e., nine and one-half months after the end of the plan year).
Under normal circumstances, no further extensions beyond a total of nine and one-half months are permitted. They may be granted, however, in cases of natural disasters, etc. (or for other reasons announced by the IRS, DOL and PBGC). In addition, where a Form 5500 is filed by a "direct filing entity" (DFE), such as a master trust, pooled separate account, or certain other comingled vehicles, the unextended filing deadline is nine and one-half months following the end of the DFE's fiscal year, and the automatic extension is not available.
The Act provides that the Secretary of the Treasury shall modify regulations applicable to Forms 5500 for years beginning after December 31, 2015, so that the maximum available extension for filing such returns will be three and one-half months rather than two and one-half months. So, beginning with calendar year 2016 returns to be filed in 2017, the automatically extended due date for the calendar-year return could be as late as November 15, 2017 (assuming that the Secretary makes the modification and the extension is timely requested). In addition, in order to maintain consistency, the automatic extensions that are linked to a sponsor's income tax filing deadline should likewise be subject to the extended limitation, and the filing deadline applicable to DFE returns should be extended by a month; these would require the Secretary of the Treasury to take action – including modifying the instructions to the Form 5500 – but there is more than sufficient time for that to be done. Until the effective time, however – including the next filing season, i.e., returns for plan years beginning in 2015, that will be filed for the most part during 2016 – the maximum extension available will remain at two and one-half months (absent some other change unrelated to the Act).