Instructions for Form 5307 |
2006 Tax Year |
This is archived information that pertains only to the 2006 Tax Year. If you are looking for information for the current tax year, go to the Tax Prep Help Area.
Line 1a.
Enter the name, address, and telephone number of the plan
sponsor/employer. A plan sponsor means:
-
In the case of a plan that covers the employees of one
employer, the employer;
-
In the case of a plan sponsored by two or more entities
required to be combined under sections 414(b), (c) or (m), one of the
members participating in the plan; or
-
In the case of a plan that covers the employees and/or
partner(s) of a partnership, the partnership.
The name of the plan sponsor/employer should be the same name that
was or will be used when the Form 5500 or Form 5500-EZ is filed for
the plan.
Address.
Include the suite, room, or other unit number after the street
address. If the Post Office does not deliver mail to the street
address and the plan has a P.O. box, show the box number instead of
the street address. The address should be the address of the
sponsor/employer.
Line 1b.
Enter the 9-digit employer identification number (EIN) assigned to
the plan sponsor/employer. This should be the same EIN that was or
will be used when the Form 5500 or Form 5500-EZ is filed for the plan.
Do not use a social security number or the EIN of the trust.
File Form SS-4, Application for Employer Identification
Number, to apply for an EIN. Form SS-4 can be obtained by calling
1-800-TAX-FORM.
The plan of a group of entities required to be combined under
section 414(b), (c), or (m) whose sponsor is more than one of the
entities required to be combined should only enter the EIN of one of
the sponsoring members. This EIN must be used in all
subsequent filings of determination letter requests and annual
returns/reports unless there is a change of sponsor.
Line 1c.
Enter the two digits representing the month the employer's tax year
ends. This is the employer whose EIN was entered on line 1b.
Line 2.
The contact person will receive copies of all correspondence as
authorized in a power of attorney, Form 2848, or other written
designation. Either complete the contact's information on this line,
or check the box and attach a power of attorney or other written
designation.
Line 3a.
Enter the number(s) that correspond to the request(s) being made.
Enter 1 if the IRS has not issued a determination letter
for this plan.
Enter 2 if the IRS has previously issued a determination
letter for this plan and enter the date the plan was signed.
In addition, enter the date the plan or amendment was signed. If a
plan or amendment is proposed, enter 9/9/9999. Enter the effective
date where requested. The term “ Date amendment effective” means
the date the amendment becomes operative or takes effect.
Enter 3 if this is a standardized plan. You must also
enter a "1" or "2" and the appropriate dates in the space provided.
Line 3b.
If you do not have a copy of the latest determination letter, or if
no determination letter has ever been received by the employer, submit
copies of the initial plan (or adoption agreement), or the latest plan
(or adoption agreement) for which you do have a determination letter,
and any subsequent amendments and/or restatements.
Line 3c.
Section 3001 of ERISA requires the applicant to provide evidence
that each employee who qualifies as an interested party has been
notified of the filing of the application. If “ Yes” is checked,
it means that each employee has been notified as required by
Regulations section 1.7476-1 or this is a one-person plan. A copy of
the notice is not required to be attached to this application. If
“ No” is checked or this line is blank, your application will be
returned.
Rules defining "interested parties" and the form of notification
are in Regulations section 1.7476-1. For an example of an acceptable
format, see Rev. Proc. 2001-6, 2001-1 I.R.B. 194
Line 4b.
Enter the three-digit number, beginning with "001" and continuing
in numerical order for each plan you adopt (001-499). This numbering
will differentiate your plans. The number assigned to a plan must not
be changed or used for any other plan. This should be the same number
that was or will be used when the Form 5500 or Form 5500-EZ is filed
for the plan.
Line 4c.
Plan year means the calendar, policy, or fiscal year on which the
records of the plan are kept.
Line 4e.
Enter the total number of participants. A participant means:
-
The total number of employees participating in the plan
including employees under a section 401(k) qualified cash or deferred
arrangement who are eligible but do not make elective
deferrals,
-
Retirees and other former employees who have a
nonforfeitable right to benefits under the plan, and
-
The beneficiary of a deceased employee who is receiving or
will in the future receive benefits under the plan. Include one
beneficiary for each deceased employee regardless of the number of
individuals receiving benefits.
Example:
Payment of a deceased employee's benefit to three children is
considered a payment to one beneficiary.
Line 5. Cash balance plan.
For this purpose, a "cash balance" formula is a benefit formula in
a defined benefit plan by whatever name (e.g., personal account plan,
pension equity plan, life cycle plan, cash account plan, etc.) that
rather than, or in addition to, expressing the accrued benefit as a
life annuity commencing at normal retirement age, defines benefits for
each employee in terms more common to a defined contribution plan such
as a single sum distribution amount (e.g., 10 percent of final average
pay times years of service, or the amount of the employee's
hypothetical account balance). Use Form 5300 rather than Form 5307, to
request a letter for a cash balance plan.
Lines 6a and 6b.
If the plan employer is a member of a controlled group of
corporations, trades or businesses under common control, or an
affiliated service group, all employees of the group will be treated
as employed by a single employer for purposes of certain qualification
requirements.
Attach a statement showing in detail:
-
All members of the group;
-
Their relationship to the plan employer;
-
The type(s) of plan(s) each member has, and
-
Plans common to all members.
Note.
If you want to apply for a determination letter to determine if you
are a member of an affiliated service group, file Form 5300 instead of
Form 5307.
Line 7d.
Answer this "Yes" if you have selected any choice labeled "Other"
in the adoption agreement..
Line 9a.
If "Yes" is checked, attach a list for each plan, which includes
the following information:
-
Name of plan,
-
Type of plan,
-
Form of plan (standardized or nonstandardized),
-
Plan number,
-
Vesting schedule,
-
Whether the plan has received a determination letter or an
application for a letter is pending with IRS.
Note.
Also indicate if the plan is paired (if paired, indicate the letter
serial number of the paired plan).
Lines 9b and 9c.
See M-8, M-12, and M-14 of Regulations section 1.416-1.
Line 10a.
Section 411(d)(6) protected benefits include:
-
The accrued benefit of a participant as of the later of the
amendment's adoption date or effective date; and
-
Any early retirement benefit, retirement-type subsidy or
optional form of benefit for benefits from service before such
amendment.
If the answer is “ Yes,” explain on an attachment how the
amendment satisfies one of the exceptions to the prohibition on
reduction or elimination of section 411(d)(6) protected benefits.
Optional Ratio Percentage Test Determination
Line 11.
This question may be used to request an optional determination
regarding the ratio percentage test under Regulations section
1.410(b)-2(b)(2). If "No" is checked and a request for a determination
regarding the average benefit test is not made on Schedule Q, the
determination letter for the plan will not be a determination
regarding section 410(b). If "No" is checked but a request for a
determination regarding the average benefit test is made on Schedule
Q, the determination letter for the plan will also be a determination
regarding the average benefit test. Plans using the qualified separate
lines of business rules of section 414(r) must file Schedule Q if a
determination is desired that the plan satisfies the gateway test of
section 410(b)(5)(B) or the special requirements for employer wide
plans.
Line 11a.
If a determination is being requested and the plan is disaggregated
into two or more separate plans, that are other than profit-sharing
and/or sections 401(k) and/or 401(m) plans, complete lines 11b through
11n with respect to each disaggregated portion of the plan. Attach
additional schedules as necessary to identify the other disaggregated
portions of the plan. Provide the requested coverage information, in
the same format as line 11, separately with respect to the other
portions of the plan, or to otherwise show that the other portions of
the plan separately satisfy section 410(b).
Example.
If this plan benefits the employees of more than one qualified
separate line of business (QSLOB), the portion of the plan benefiting
the employees of each QSLOB is treated as a separate plan maintained
by that QSLOB and must separately satisfy section 410(b) unless the
employer-wide plan testing rule in Regulations section
1.414(r)-1(c)(2)(ii) applies.
If a determination is being requested for a section 401(k) and/or
401(m) plan you must complete line 11l for the portion of the plan
that is not a section 401(k) or a 401(m) plan. Also complete line
11m(1) to report the ratio percentage for the section 401(k) portion
of the plan and line 11m(2) to report the ratio percentage for the
section 401(m) portion of the plan.
Line 11c.
If, for purposes of satisfying the minimum coverage requirements of
section 410(b), you are applying the daily testing option in
Regulations section 1.410(b)-8(a)(2) or the quarterly testing option
in Regulations section 1.410(b)-8(a)(3), or, if you are using
single-day "snapshot" testing as permitted under section 3 of Rev.
Proc. 93-42, 1993-2 C.B. 540, enter the most recent eight-digit date
(MMDDYYYY) for which the coverage data is submitted. If you are
applying the annual testing option in Regulations section
1.410(b)-8(a)(4), enter the year for which the coverage data is
submitted.
Line 11d.
Include all employees of all entities combined under sections
414(b), (c), (m), or (o). Also include all self-employed individuals,
common law employees, and leased employees as defined in section
414(n) of any of the entities above, other than those excluded by
section 414(n)(5). Certain individuals may also be required to be
counted as employees. See the definition of employee in Regulations
section 1.410(b)-9. Also see Regulations section 1.410(b)-6(i), which
may permit the employer to exclude certain former nonhighly
compensated employees.
Note.
This note applies only to plans that include a qualified cash or
deferred arrangement under section 401(k) or employee or matching
contributions under section 401(m). If there are any contributions
under the plan that are not subject to the special rule for section
401(k) plans and section 401(m) plans in Regulations section
1.401(a)(4)-1(b)(2)(ii)(B) (such as nonelective contributions),
complete lines 11e through 11k with respect to the portion of the plan
that includes these contributions and enter the ratio percentage for
this portion of the plan on line 11l. Otherwise, complete lines 11e
through 11k with respect to the section 401(k) part of the plan (or
the section 401(m) plan if there is no section 401(k) arrangement) and
leave line 11l blank. In all cases, enter the ratio percentages for
the section 401(k) and the section 401(m) parts of the plan, as
applicable, on line 11m. These percentages should be based on the
actual nonexcludables in the 401(k) and 401(m) portions, respectively.
It is suggested that these calculations be submitted with the
application but this is optional.
If the plan provides for nonelective profit-sharing contributions,
do not base the calculations on lines 11m(1) and (2) on the
nonexcludable employees reported on line 11g unless all of the
disaggregated plans (profit-sharing, 401(k), and 401(m)) have the same
nonexcludable employees with the same age and service requirements.
Line 11e(1).
Enter the number of employees who are excluded because they have
not attained the lowest minimum age and service requirements for any
employee under this plan. If the employer is separately testing the
portion of a plan that benefits otherwise excludable employees, attach
a separate schedule describing which employees are treated as
excludable employees on account of the minimum age and service
requirements under each separate portion of the plan.
Line 11e(2).
Enter the number of employees who are excluded because they are
collectively bargained employees as defined in Regulations section
1.410(b)-6(d)(2), regardless of whether those employees benefit under
the plan. For this purpose, an employee covered under a CBA is not
considered a collectively bargained employee if more than 2% of the
employees who are covered under the agreement are professional
employees as defined in Regulations section 1.410(b)-9.
Line 11e(3).
Enter the number of employees who do not receive an allocation or
accrue a benefit under the plan only because they do not satisfy a
minimum hours of service requirement or a last day of the plan year
requirement, provided they do not have more than 500 hours of service,
and they are not employed on the last day of the plan year. Do not
enter on this line any employees who have more than 500 hours of
service, even if they are not employed on the last day of the plan
year.
Line 11e(4).
If this plan benefits the employees of one QSLOB, enter on this
line the number of employees of the employer's other QSLOBs. This is
not applicable if the plan is tested under the special rule for
employer-wide plans in Regulations section 1.414(r)-1(c)(2)(ii).
Line 11e(5).
Enter the number of employees who are nonresident aliens who
receive no earned income (as defined in section 911(d)(2)) from the
employer that constitutes income from sources within the United States
(as defined in section 861(a)(3)).
Line 11g.
Subtract the total of lines 11e(1) through 11e(5) as reported on
line 11f from the total employees reported on line 11d. The result is
the number of "nonexcludable employees." These are the employees who
can not be excluded from the plan for statutory or regulatory reasons
and must be considered in the calculation of the ratio percentage even
though they might not "benefit" under the plan. If they meet the age
and service requirements of section 410 and are not otherwise
excludable employees, they must be included in this number.
Line 11h.
Enter the number of employees on line 11g who are highly
compensated employees (HCEs) as defined in section 414(q).
Line 11i.
In general, an employee is treated as benefiting under the plan for
coverage tests purposes only if the employee receives an allocation of
contributions or forfeitures or accrues a benefit under the plan for
the plan year. Certain other employees are treated as benefiting if
they fail to receive an allocation of contributions and/or
forfeitures, or to accrue a benefit, solely because they are subject
to plan provisions that uniformly limit plan benefits, such as a
provision for maximum years of service, maximum retirement benefits,
application of offsets or fresh start wear-away formulas, or limits
designed to satisfy section 415. An employee is treated as
benefiting under a plan to which elective contributions under section
401(k) or employee contributions and matching contributions under
section 401(m) may be made if the employee is currently eligible to
make such elective or employee contributions, or to receive a matching
contribution, whether or not the employee actually makes or receives
such contributions, (Regulations section 1.401(k)-1(g)(4) and
1.401(m)-1(f)(4)). However, do not apply this rule to determine if an
employee is to be counted as benefiting for lines 11i and 11k if, in
accordance with the Note following the instruction for line
11d, the information provided in lines 11e through 11k relates to the
portion of the plan that is not subject to the rule in Regulations
section 1.401(a)(4)-1(b)(2)(ii)(B).
Line 11k.
See the instructions for line 11i for the meaning of "benefiting
under the plan."
Line 11l.
To obtain the ratio percentage:
Step 1.
Divide the number on line 11k (nonexcludable NHCEs benefiting under
the plan) by the number on line 11j (nonexcludable NHCEs).
Step 2.
Divide the number on line 11i (nonexcludable HCEs benefiting under
the plan) by the number on line 11h nonexcludable HCEs).
Step 3.
Divide the result from Step 1 by the result from Step 2.
Note.
If the ratio percentage entered on line 11l and/or line 11m is less
than 70%, the plan does not satisfy the ratio percentage test. In this
case, the plan must satisfy the average benefit test. A determination
regarding the average benefit test can be requested using Schedule Q.
Line 11m.
See the Note following the instructions for line 11d. To
determine the ratio percentages for the section 401(k) and all section
401(m) (matching and employee contribution) portions of the plan,
follow the steps described in the instructions for lines 11d through
11l, but treat an employee as benefiting under the rules for section
401(k) plans and section 401(m) plans described in the instruction for
line 11i.
Design-Based Nondiscrimination Safe Harbors
Line 12.
This question may be used by certain plans to request an optional
determination regarding the design-based safe harbor under section
401(a)(4).
If this is a section 401(k) and/or section 401(m) plan that does
not contain a provision for nonelective employer contributions, this
option should be marked “ No.”
If any disaggregated plan relies on a non-design based safe harbor
or a general test this option must be marked "No." The Schedule Q may
be used to request a determination regarding a non-design based safe
harbor or a general test.
If this plan has been restructured into component plans, this
option must be marked “ No.” The Schedule Q may be used to request
a determination regarding how each restructured component plan
satisfies the nondiscrimination in amount requirement of Regulations
section 1.401(a)(4)-1(b)(2).
If “ Yes” is checked, or if “ No” is checked but a request
for a determination regarding a non-design based safe harbor or a
general test is made on Schedule Q, the determination letter for the
plan will also be a determination regarding the section 401(a)(4)
requirement that a plan not discriminate in the amounts of
contributions or benefits.
If “ No” is checked, and a request for a determination
regarding a non-design based safe harbor or a general test is not made
on Schedule Q, the determination letter for the plan will not be a
determination regarding this requirement, unless the plan is a section
401(k) and/or section 401(m) plan only.
Line 12a.
Check "Yes" if the plan is intended to satisfy the permitted
disparity requirements of section 401(I).
Line 12b.
To satisfy section 401(l), a plan must provide that the overall
permitted disparity limits are not exceeded and specify how
employer-provided contributions or benefits under the plan are
adjusted, if necessary, to satisfy the overall permitted disparity
limits. See Regulations section 1.401(l)-5.
Line 12c.
This line provides a list of the design-based nondiscrimination
safe-harbor regulations.
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