True or false; a one-participant plan with assets less than $500,000 is not required to file a Form 5500-EZ.

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Multiple Choice

True or false; a one-participant plan with assets less than $500,000 is not required to file a Form 5500-EZ.

A one-participant plan with assets less than $500,000 is indeed required to file a Form 5500-EZ, contrary to the statement presented in the question. The Form 5500-EZ is an annual report that must be filed by one-participant plans unless they qualify for a filing exemption. The requirement exists to ensure transparency and compliance with federal regulations. It's important to note that the threshold of $500,000 is relevant in determining the need to file; however, for one-participant plans specifically, they must file the form whenever their assets surpass this amount at the end of their plan year. Therefore, if the plan does not meet the asset threshold, the filing requirement is waived. This means that the initial statement asserting that a plan with less than $500,000 is "not required" to file is not correct in all circumstances; indeed, the requirement to file is strictly dependent on the plan's asset value at year-end. The other options introduce conditions that do not apply universally to the filing requirements of one-participant plans. The requirement is straightforward and revolves around the asset value, rather than participant count or company type.

A one-participant plan with assets less than $500,000 is indeed required to file a Form 5500-EZ, contrary to the statement presented in the question. The Form 5500-EZ is an annual report that must be filed by one-participant plans unless they qualify for a filing exemption. The requirement exists to ensure transparency and compliance with federal regulations.

It's important to note that the threshold of $500,000 is relevant in determining the need to file; however, for one-participant plans specifically, they must file the form whenever their assets surpass this amount at the end of their plan year. Therefore, if the plan does not meet the asset threshold, the filing requirement is waived. This means that the initial statement asserting that a plan with less than $500,000 is "not required" to file is not correct in all circumstances; indeed, the requirement to file is strictly dependent on the plan's asset value at year-end.

The other options introduce conditions that do not apply universally to the filing requirements of one-participant plans. The requirement is straightforward and revolves around the asset value, rather than participant count or company type.

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