Form 5500 is an annual return that retirement plans must file with the Department of Labor (DOL) and Internal Revenue Service (IRS) each year. Gusto Retirement files Form 5500 on behalf of your plan at no additional cost. This article answers common questions about reading your filing, understanding specific values, requesting changes, and handling final filings.
Important: Gusto files on a cash basis. This means we report transactions in the year they settle into the plan account, not the payroll date. If a contribution was made for a Dec. 31 payroll but settled in the following year, it will appear on the following year's Form 5500. This may cause differences between your dashboard reports and your Form 5500.
Here are answers to common questions about filing your Form 5500.
You may file your own Form 5500, but Gusto Retirement offers this service to plan sponsors at no additional cost. If you decide to file on your own, let us know at [email protected].
If the plan was with Gusto Retirement for the full year the IRS notice references, upload a copy of the full IRS notice to your Shared Folder and follow up by email at [email protected]. The most common explanation is a change in Employer Identification Number (EIN).
If your plan was with a different provider for any part of the year referenced, we cannot file that year's Form 5500 because we were not the record keeper and do not have the necessary information. In this case, contact your former provider for more information regarding their filing policies.
No. Because Gusto Retirement files on a cash basis, we only report funds that settled during the plan year. Any profit-sharing contribution made this year will appear on the following year's Form 5500.
402(g) refunds (a distribution of excess deferrals) are reported on the Form 5500 in the year they are distributed, because we report on a cash basis.
Here's what to know about common values found on your Form 5500.
Gusto Retirement prepares the Form 5500 on a cash basis, while your dashboard reflects contributions and balances based on contribution dates (accrual basis).
The values most likely impacted are the final contributions for the current year and the prior year. For example, the last payroll of a year may be missing from the beginning-of-year balance because it did not settle until the second or third day of the next year.
A participant on Form 5500 includes any eligible employee who may or may not be actively contributing, as well as terminated or deceased employees with a balance.
The total number of participants includes:
Employees eligible to participate and enrolled in the plan
Employees eligible to participate but not enrolled in the plan
Previous employees who are deceased or have terminated employment but still have a remaining vested balance
Gusto prepares Form 5500 on a cash basis, while the contribution report uses an accrual basis. We report funds on the date they settle in the account, not on the payroll date. Typically, the last payroll run of the year is not reflected in the current year's Form 5500 and will instead appear on the following year's filing.
Line 8b is the net sum of all dividends, gains/losses (realized and unrealized), interest, and loan interest in the plan year. A negative value reflects a downturn in the market during that period.
Your BTC Trust Report may show the closest values. To access this report, go to Account Documents, then Trust Statements. The values will be found under "Schedule of Payments to Participants."
Note: Gusto reports on settled dates, while BTC (the plan custodian) reports on the date the transaction was initiated, so there may be slight differences.
Line 10a is marked "yes" if employee deferrals or loan payments were not deposited within seven business days after the pay date (for plans with fewer than 100 participants). For larger plans, Gusto uses five business days. It may also be marked "yes" if the plan had late deposits from a previous plan year that have not been fully corrected.
If the late contribution includes employee contributions or loan payments, you may owe excise taxes to the IRS. In this case, we will prepare a Form 5330 on your behalf and notify you once it is available in your Resource Library. The excise tax is calculated as 15% of the lost earnings owed. It is your responsibility to sign, file, and submit payment to the IRS directly. Learn more about late contributions.
You can find the "Late Transactions" report in your Resource Library with the pay dates affecting this value for the year.
This is the value of the fidelity bond that Gusto Retirement holds for all plans. It covers potential losses caused by fraud or dishonesty. The value is high because the bond covers all Gusto Retirement plans as a whole, not on an individual level. You do not need to verify this number.
If your plan itself (as opposed to the plan sponsor or administrator) is a named insured under a separate fidelity bond that protects the plan from losses due to fraud or dishonesty, let us know the amount of coverage and we can add this information to your Form 5500.
Here's how to request changes or amendments to your Form 5500.
Company name, address, and phone number changes do not require an amended filing. Update your information in your Gusto Retirement dashboard so our records are current. The updated information will appear on your next Form 5500.
To update your EIN, choose the path that matches how you signed in:
If you accessed your dashboard via your main Gusto account (Benefits > Active Benefits > 401(k) > Manage), follow these steps:
Select Settings in your dashboard menu.
Scroll to the Company information section and select Edit to update your fields.
If you used the direct Gusto Retirement sign-in page, follow these steps:
Select your company name in the upper-right corner of the screen.
Select Settings from the dropdown menu.
Find the Company information section and select Edit to make your changes.
If you are not the trustee of the plan, any company information changes will automatically be sent to the trustee's dashboard for approval. The information will show as Pending until the trustee completes the task.
Important: Form 5500 will not be filed until the trustee completes the dashboard task. Once the edit has been made, notify us at [email protected] to update your form.
Review the "Understand specific Form 5500 values" section above to confirm there is not a standard explanation for the discrepancy. If you believe there is still an error, notify us at [email protected].
Here's what to know about filing dates, extensions, and related tasks.
No. There is no penalty for filing the extension for Form 5500.
Depending on the design of your plan, the legal effective date may be Jan. 1, even if the actual start date was later in the year.
In general, if the plan has matching contributions or no per-pay-period employer nonelective contributions, Gusto Retirement uses a Jan. 1 effective date so the maximum matching contribution and profit sharing can be based on compensation for the full calendar year. Plans with nonelective contributions made per pay period most often have mid-year start dates to help prevent the plan from needing to make up contributions for compensation earned before the plan started.
Your plan may have added Gusto Retirement Services, LLC as a 3(16) fiduciary (a third-party fiduciary that handles plan administration) since last year. If Gusto Retirement Services is your 3(16) fiduciary, we sign Form 5500 on your behalf, and you will not get a signature request.
If Gusto Retirement is not the plan's 3(16) fiduciary, a signature task will be sent to the plan's trustee. Form 5500 will not be filed until the trustee signs the filing.
If your plan was with a different provider before Gusto Retirement, we may ask you to provide information about activity between Jan. 1 and your plan start date with Gusto. Your prior provider should be able to help you obtain this information. The task covers three areas:
Prior plan admin
Total plan assets used to pay plan service providers
Total plan assets used to pay insurance service providers
Total plan assets used to pay other expenses
The number of participants who were terminated before reaching 100% vesting
Prior plan assets
Were all invested assets considered eligible assets¹?
Was your plan involved in a merger/spinoff, and were there asset transfers from that?
Prior plan errors
Any loss to the plan caused by fraud or dishonesty
Any non-exempt transactions that occurred
The amount of participant contributions or loan payments that failed to transmit within seven business days after being withheld from the participant's paycheck
The amount of benefits, like required minimum distributions (RMDs), that the plan failed to pay when due
¹ Eligible assets are assets that have an easily determinable fair market value, are not employer securities, and are held or issued by a regulated financial institution.
When a Gusto 401(k) plan terminates, regulations require that a Final Form 5500 be filed. Gusto Retirement files this on behalf of all terminating plans once the trust account has been fully liquidated and closed.
The final filing is due on the last day of the seventh month after the later of:
The date the plan was terminated, or
The date the trust has no assets
The filing will show that all plan assets have been fully distributed.
Compared to the annual filing of the Form 5500, you do not need to take any separate action. If your plan has terminated and you need a copy of the Final Form 5500, you can search for it on the Department of Labor website, as these forms are public record.