Participant loan balance on Form 5500-EZ
A narrow guide for participant loan records, year-end balance, and when loan issues push a Solo 401(k) case outside simple packet preparation.
Summary
A Solo 401(k) participant loan is a plan record, not a personal note to ignore. Before preparing Form 5500-EZ, collect the loan agreement, amortization schedule, year-end outstanding balance, repayments, defaults or deemed distribution records. Unclear or defaulted loans are outside a simple packet workflow.
Participant loans can affect plan asset records and hard-stop review.
| Needed records | Loan agreement and scheduleKeep repayment and year-end balance support. |
|---|---|
| Review point | Outstanding balanceShould reconcile to plan records. |
| Hard stop | Default or deemed distributionRequires official instructions or professional review. |
What to collect
Collect the signed loan agreement, amortization schedule, repayment records, custodian statement, year-end balance, payoff record if any, and any plan-administrator notes.
Example
A participant loan had $14,200 outstanding at the start of the year, $3,600 repaid during the year, and $10,600 outstanding at year end. The packet should preserve those source records rather than only listing total brokerage assets.
When to stop
Stop for missed payments, loan default, deemed distribution, refinance, multiple loans, spouse/partner loans, prohibited transaction concerns, or correction questions.
Common questions
Can Solo 5500 Desk decide if my loan is compliant?
No. Loan compliance, defaults, deemed distributions, prohibited transactions, and correction strategy are outside scope.
What if the loan was repaid during the year?
Keep payoff and repayment records. If the year-end balance is zero, the loan still belongs in the annual record trail for review.
Related guides
Participant loans and Form 5500-EZ reporting
What to collect when a Solo 401(k) had a participant loan during the plan year.
Form 5500-EZ example for a one-participant Solo 401(k)
An illustrative source-record example showing how a simple Solo 401(k) packet is organized before filing Form 5500-EZ.
Do I need to file Form 5500-EZ for my Solo 401(k)?
The direct filing test for one-participant plans: asset threshold, final year, deadline, and filing method.