IRS Form 14568-F – IRS Form, Instructions, Pubs 2026

IRS Form 14568-F – Employer eligibility failures in retirement plans can jeopardize the tax-favored status of 401(k) and 403(b) plans, leading to serious tax consequences for both sponsors and participants. The IRS offers a streamlined way to voluntarily correct these issues through the Employee Plans Compliance Resolution System (EPCRS), specifically via the Voluntary Correction Program (VCP).

Form 14568-F (Rev. March 2020) serves as the official Model VCP Compliance Statement Schedule 6 for these failures. This fillable PDF helps plan sponsors document the failure, propose a standardized correction, and outline preventive measures—all while seeking IRS approval to preserve plan qualification.

Download the latest official form directly from the IRS: Form 14568-F PDF.

This guide, based exclusively on current IRS resources (including the form itself, Revenue Procedure 2021-30, and official IRS retirement plan pages as of 2025–2026), explains everything you need to know.

What Is an Employer Eligibility Failure?

An employer eligibility failure occurs when a plan is adopted or maintained by an organization that does not meet the legal requirements under the Internal Revenue Code (IRC) to sponsor that type of plan.

For 403(b) Plans (Tax-Sheltered Annuities):

The sponsor must be a tax-exempt organization described in IRC Section 501(c)(3), a public educational organization under IRC Section 170(b)(1)(A)(ii), or certain other eligible entities (e.g., ministers or Indian tribal governments in specific cases).
Ineligible sponsors include for-profit entities or non-qualifying tax-exempt organizations (e.g., social clubs under 501(c)(7)).

For 401(k) Plans:

The employer must qualify under IRC Sections 401(a) and 401(k). Common ineligible sponsors include:
- Governmental entities (state or local governments generally cannot sponsor 401(k) plans with elective deferrals, except in limited grandfathered situations).
- Certain tax-exempt organizations before the Small Business Job Protection Act of 1996 changes.

If uncorrected, contributions lose tax-deferred status: the sponsor may owe payroll taxes, and participants face immediate income inclusion plus potential penalties.

When Should You Use Form 14568-F?

Use Schedule 6 (Form 14568-F) whenever you discover an employer eligibility failure in a 401(k) or 403(b) plan and want to correct it under VCP.

It is not for other plan failures—those use different schedules in the Form 14568 series (e.g., Schedule 1 for 403(b) plan document issues).

Key requirements for VCP eligibility (per Rev. Proc. 2021-30):

The plan or sponsor is not under IRS examination.
You submit before the IRS discovers the failure.
You stop contributions immediately upon discovery (for self-correction attempts under expanded SCP rules via SECURE 2.0/Notice guidance, contributions must halt no later than 6 months after identification in many cases).

Note: While SECURE 2.0 expanded self-correction (SCP) for many inadvertent failures, employer eligibility failures often still require VCP approval, especially if significant or outside tight timelines. Always consult the latest EPCRS guidance.

How to Complete Form 14568-F: Step-by-Step?

The one-page form (plus attachments) includes three mandatory sections. Do not modify the format or content.

Section I – Identification of Failure

Check the box for 401(k) or 403(b).
For 403(b): Describe the sponsoring organization’s type during the failure period (e.g., “for-profit corporation” or “501(c)(7) social club”).
For 401(k): Explain why the employer was ineligible (e.g., “governmental entity”).
List the plan years affected.
Attach extra pages if needed (label: “Section I of Form 14568-F, Identification of Failure” + plan name, EIN, and plan number on every page).

Section II – Description of Proposed Method of Correction The IRS provides a standardized, safe-harbor correction:

All contributions (employee and employer) cease no later than the VCP submission filing date.
No new contributions are permitted in the future.
Existing assets remain in the trust, annuity contract, or custodial account.
Distributions are allowed only upon a permitted event:
- For 403(b): IRC Section 403(b)(7) or 403(b)(11) events (e.g., severance from employment, age 59½, disability).
- For 401(k): Standard qualified plan distribution rules under IRC Section 401(k).

Section III – Change in Administrative Procedures

Explain how and why the failure occurred.
Detail new procedures to prevent recurrence (e.g., legal review before adopting any plan, annual eligibility checks by counsel or TPA).
Attach extra pages as needed (properly labeled).

Include this schedule with the main Form 14568 (Model VCP Compliance Statement).

Full VCP Submission Process Using Form 14568-F

Gather documents:
- Form 8950 (Application for VCP).
- Form 8951 (Compliance/User Fee – amount based on plan assets).
- Form 14568 + Schedule 6 (Form 14568-F).
- Narrative attachments explaining the failure, correction, and prevention.
- Copy of the plan document (and signed written 403(b) plan if applicable).
- Form 2848 (Power of Attorney) or 8821 (if represented).
Submit electronically via Pay.gov (search for Form 8950). Combine all PDFs into one file (<15 MB).
IRS review: The IRS issues a compliance statement upon approval. Implement the correction as described.

User fees are generally based on plan asset size and are much lower than disqualification consequences.

Benefits of Correcting with Form 14568-F and VCP

Preserves tax-deferred status of all contributions and earnings.
Avoids plan disqualification, payroll taxes, and participant income inclusion.
Provides IRS-approved “safe harbor” correction with no negotiation needed if followed exactly.
Demonstrates good-faith compliance to auditors and participants.

Prevention Tips and Best Practices

Have legal counsel or an ERISA attorney review sponsor eligibility before adopting any 401(k) or 403(b) plan.
Conduct annual compliance audits with a qualified TPA or advisor.
For 403(b) sponsors: Confirm 501(c)(3) or public school status in writing.
Maintain a current written plan document that reflects eligible sponsor status.

Frequently Asked Questions

Q: Is Form 14568-F still current in 2026?
A: Yes. The IRS continues to list the March 2020 revision as the official version on its forms and retirement plans pages.

Q: Can I self-correct instead of using VCP?
A: Limited options exist under expanded SCP rules (Rev. Proc. 2021-30 + SECURE 2.0 guidance), but you must halt contributions within 6 months of discovery and meet all other conditions. Most significant eligibility failures require VCP for full protection.

Q: Where can I find more help?
A: Official IRS resources:

Bottom line: Discovering an employer eligibility failure doesn’t have to end in disaster. IRS Form 14568-F provides a clear, IRS-approved roadmap to fix 401(k) and 403(b) sponsor eligibility issues quickly and cost-effectively under VCP.

If you’ve identified this failure in your plan, download the form today, consult your retirement plan advisor or ERISA counsel, and submit through Pay.gov for peace of mind and continued tax advantages for your employees.

This article is for informational purposes only and is not tax or legal advice. Always refer to the official IRS form, instructions, and current Revenue Procedures for your specific situation.