Since March 2025 a small, recent late deposit can be fixed with an electronic notice instead of a full application. Four questions decide which side of the line you are on.
The rule is eighteen months old and covered almost entirely in lawyer’s prose. The figures you enter never leave your browser. Privacy.
Self correction reaches two things only. Everything else in the correction programme goes the long way round however small it is.
Nothing else can be settled until it has, and every further day adds to what is owed.
In days, for the worst pay period in the correction. One period past 180 days takes the whole correction out of self correction, so the longest one is the one that matters.
Enter the largest single pay period. Be aware the Department of Labor’s fact sheet describes the $1,000 ceiling as applying to the lost earnings TOTAL for the correction, while other descriptions apply it per pay period. We have not resolved which, so check your total as well. If you do not have the figure, work it out first and come back.
By the Department of Labor or the IRS. A plan under investigation cannot self correct.
Since 17 March 2025, yes, if it is small and recent. The principal must have reached the plan within 180 days of withholding and the lost earnings must be $1,000 or less per transaction. You file an electronic notice instead of preparing a full Voluntary Fiduciary Correction Program application. Self correction covers late employee deferrals and late participant loan repayments only.
This is genuinely unsettled in the public material and it changes answers. The Department of Labor's own fact sheet says the component is available where lost earnings TOTAL $1,000 or less, while other descriptions apply the limit to each transaction, normally each pay period. Eight pay periods at $200 each qualify on one reading and not on the other, so check your total as well as your largest period, and confirm before relying on either. Separately, self correction measures lost earnings from the date of withholding, which is earlier than the start date a full application uses, so its own figure comes out higher.
The whole correction goes through the full programme. The test looks at each transaction, so a single pay period past 180 days is enough to take the rest with it. Do not split one systemic payroll failure into smaller pieces to get under either limit, which the 2025 rule calls out by name.
Not automatically. A late deposit is a prohibited transaction, and until both the principal and the lost earnings are in the plan, each open year is a separate one carrying a 15% excise tax and its own Form 5330. Relief comes from meeting the conditions of the class exemption that accompanies the correction programme, so check those conditions against your facts rather than assuming the correction alone settles it.