Employers that adopt individually designed qualified retirement plans typically apply for an Internal Revenue Service (IRS) determination letter. A favorable IRS determination letter ensures that the qualified plan is entitled to favorable tax treatment and indicates that the plan document, as written, complies with the applicable statutory and regulatory requirements set out by the IRS (see Practice Note, Requirements for Qualified Retirement Plans).

The application for an IRS determination letter, which can be complicated and time sensitive, is a combination of IRS forms and documents that are sent to the IRS on behalf of the plan.

The IRS determination letter application allows the IRS to:

In 2016, the Internal Revenue Service (IRS) issued Revenue Procedure 2016-37 which significantly changed the IRS determination letter program. Effective January 1, 2017, the IRS no longer accepts determination letter applications for individually designed plans except for new plans, terminating plans, and in certain other limited circumstances, including individually designed merged plans and individually designed hybrid plans (see Practice Note, Revised IRS Determination Letter Program for Individually Designed Qualified Plans and Legal Update, IRS Rev. Proc. 2019-20 Expands Determination Letter Program).

Every year the IRS updates and restates its revenue procedure for applying for determination letters. For 2024, this information can be found in Revenue Procedure 2024-4 (see Legal Update, IRS Rev. Proc. 2024-4 Updates the Determination Letter Program).

The Retirement Plan Determination Letters Toolkit provides several continuously maintained resources designed to assist an employer in applying for an IRS determination letter for its individually designed qualified plans.