We terminated an owner-only plan below the usual asset threshold. Can we skip its final annual return?
A one-participant plan's final-year filing generally is required even when assets are below the usual Form 5500-EZ filing threshold.
By AE Tax Advisors Team · Updated October 29, 2026
A one-participant plan's final-year filing generally is required even when assets are below the usual Form 5500-EZ filing threshold. Termination, complete distribution and the final return must be coordinated. A zero ending balance does not automatically mean no return is due.
A specific business-owner situation
An owner terminates a small plan and distributes its last assets. The provider closes the investment account, but that action does not itself file the plan's final annual return.
Illustrative example, not a client result.
What to establish before filing
- Confirm termination and final distribution dates.
- Review final-year filing requirements.
- Reconcile all assets and outstanding obligations.
Which fact changes the answer?
A plan intended to terminate but still holding assets differs from one that distributed everything. Final-return status depends on the actual closeout facts.
A mistake to avoid
Do not confuse closing the brokerage account with completing plan reporting.
Records that support the decision
- Termination documents.
- Distribution and rollover evidence.
- Final account statements.
The decision to document
Obtain written confirmation of the final filing and retain the plan's permanent records after the investment account is closed.
Business-owner tax planning and preparation scope · Discuss advisory scope with AE
Related questions
- Can I name my children as sole beneficiaries of the company retirement plan without my spouse consenting?
- Our owner-only plans each hold less than the filing threshold. Can we test each account separately?
Sources and editorial context
- IRS Publication 560: small-business retirement plans
- IRS Form 5500-EZ instructions: one-participant plans
General educational information prepared with AI assistance. No individual professional review is claimed. Apply the relevant tax-year rules to the actual records. Editorial policy · AI disclosure.