Employee Benefit Plan Audit Requirements

The Internal Revenue Service requires companies and nonprofit organizations with over 100 eligible employees, regardless of participation, to receive an annual audit of the plan.

• If your plan has 120+ eligible participants on the 1st day of the plan year, the plan is required to have an audit.
• If your plan has less than 100 eligible participants on the 1st day of the plan year, the plan is not required to have an audit if your file Form 5500 as a Small Plan (Schedule I) rather than as a Large Plan (Schedule H).
• If your plan has between 100 and 119 participants on the first day of the plan year, the plan is not required to have an audit as long as you filed Form 5500 as a Small Plan (Schedule I) in the prior year.

Employee benefit plans are required to file Form 5500 seven months after the plan year-end.  For calendar year-ends, this would be July 31st.  An extension of two and a half months can be granted with the filing of Form 5558.  For calendar year-end plans, this would be October 15th.

Contributed By: Zach Richards, CPA, CFE | Director | DWD CPAs & Advisors