I have heard from a couple of clients recently who have received a penalty notice from the IRS for purportedly filing a late or incomplete 2022 Form 8955-SSA (the IRS form that plan sponsors use to report terminated participants with vested benefits), despite having timely filed Form 8955-SSA earlier this summer. While initially causing some concern, the IRS recently announced that due to a programming error, the IRS’s system automatically sent out Form 8955-SSA penalty notices to those plan sponsors who had already timely filed their 2022 Form 8955-SSA.

The announcement provides that the system error has been resolved and that plan sponsors who timely filed a complete 2022 Form 8955-SSA can ignore any 2022 penalty notice dated prior to September 1, 2023. This is refreshing news, as we rarely get to advise clients to ignore notices they receive from the IRS. The announcement also reminds plan sponsors that Form 8955-SSA must be filed with the IRS and not through the Department of Labor’s EFAST2 system.

For those plan sponsors who have not yet filed their Form 8895-SSA, the deadline with extension is coming right up. Form 8955-SSA is generally due on the same date as a plan’s Form 5500 (for a calendar year plan that would be July 31 of the year following the year in which the form pertains to). Like the Form 5500, Form 8955-SSA can also easily be extended by two and a half months to October 15 using Form 5558, the same form used to extend a plan sponsor’s Form 5500.