There are limited exceptions to defer or waive a plan audit, as described below.
- Deferral for Short Plan Year: If your plan year is shorter than 7 months, you may defer the audit to the following year. This does not eliminate the need for an audit; rather, the subsequent year’s audit will cover the first two calendar years of the plan.
- 80-120 Rule: This allows you to waive the audit requirement if your plan filed a 5500-SF in the previous year without an audit and participant count does not exceed 120 at the beginning of the plan year.
- For Example, if in 2019, you filed the 5500-Short Form with 93 participants and in 2020, you have 115 participants, you are eligible to file as a 5500-Short Form indefinitely until you reach 121 participants at the beginning of the plan year.
- If in 2019 you filed the 5500 with an audit and had 130 participants, and in 2020 you have 110 participants, you must file the 5500 with an audit.
- Once the participant count drops below 100, you are eligible to file as a short form again.
If you have received a notification from Guideline informing you of the audit requirement, and feel you qualify for one of these exemptions, please contact us by emailing firstname.lastname@example.org so we may be of assistance.