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Re Form 5500EZ preparation Does having 10 employees (1 owner/president

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Re: Form 5500EZ preparation:...
Re: Form 5500EZ preparation: Does having 10 employees (1 owner/president and 9 part-time less than 1000 hours per yr) disqualify us using Form 5500EZ?
Do the 9 part-time employees need to be included in the Code section 410(b) calculations relating to coverage requirements?
Submitted: 6 years ago.Category: Tax
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Answered in 1 hour by:
6/2/2011
Tax Professional: Anne, Master Tax Preparer replied 6 years ago
Anne
Anne, Master Tax Preparer
Category: Tax
Satisfied Customers: 2,439
Experience: Enrolled Agent with 25 Years Experience specializing Individual and Small Businesses
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HI

Thank you for using justanswer.

According to Instruction 5500-EZ You may only use Form 5500EZ if:

"the plan covers only your (or your spouse), and you or your spouse own the entire business, which may be incorporated or unincorporated, or covers one or more partners (or partners or their spouses) in a business partnership, and does not provide benefits for anyone but you (or your spouse) or one or more partners and their spouses."

This would mean that you would not be eligible for using the 5500EZ form since you stated you have employees.

You would need to file Form 5500.

I hope this helps
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Customer reply replied 6 years ago
Yeah, I read the instructions too! ALL the employees worked less than 1000 hours for the year. How does that affect which form to file?
Tax Professional: Anne, Master Tax Preparer replied 6 years ago
Once your business expands from you, your spouse, one or more business partners and their spouses,and includes employees, you fall out of the parameters of being able to use the Form 5500EZ and you must then use Form 5500. The 1000 hours threshold for employees is not covered as an exception to be able to continue using the Form 5500EZ.

You may phone the IRS at 1-877-829-5500 if you would like a ruling straight from the IRS on this matter.

I hope this helps.
Anne
Anne, Master Tax Preparer
Category: Tax
Satisfied Customers: 2,439
Experience: Enrolled Agent with 25 Years Experience specializing Individual and Small Businesses
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