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On Dec. 28, employers subject to the Affordable Care Act’s 2015 information reporting requirements were given extra time to furnish these forms to employees and file them with the IRS. In IRS Notice 2016-4, the agency officially extended the information reporting due dates.
- Due date for furnishing forms to individuals has been extended to March 31, 2016.
- Due date for filing forms with the IRS has been extended to May 31, 2016 or June 30, 2016 if filing electronically.
More details on the delayed ACA Reporting deadlines are included in the Treasury press release.
As 2015 quickly comes to a close, many employers should already have established a game plan for the Affordable Care Act (ACA) requirements imposed on applicable large employers (ALEs) and small employers that may sponsor self-insured health plans.
These employers are required to file annual ACA reports with the IRS providing information on offers of coverage made to full-time employees, using IRS Forms 1094-C and 1095-C. The
reporting requirements are particularly complex so the there is little time to waste when it comes to gathering the necessary data in preparation to complete the forms by early 2016.
Deadlines to File
For the 2015 calendar year, the Forms 1094-C and 1095-C need to be filed with the IRS by February 28, 2016, if filing on paper, or March 31, 2016 if filing electronically. Employers will also need to furnish the Form 1095-C to every full-time employee by January 31, 2016. To assist with questions, the IRS has an ACA Information Center website that is designed to help employers that have reporting obligations and includes links to the 2015 Forms 1094-C and 1095-C along with detailed instructions.
Earlier this year, Congress increased the penalties for failing to comply with these new reporting requirements. Failing to furnish the required form on time can result in penalties up to $250/failure, subject to a calendar maximum of $3,000,000. For 2015 information returns only, the IRS has stated they will not impose penalties for incorrect or incomplete information if the employer can demonstrate good faith in attempting to comply with the requirements. However, it’s important to know that this relief is not available to employers that fail to file or furnish required returns on time so meeting deadlines is imperative.
Extensions and Waivers
In the event you find yourself running short on time, don’t let the deadlines lapse and risk incurring penalties. There are a number of options offered by the IRS that are worth considering and include:
- An automatic 30-day extension to file returns with the IRS is available using Form 8809, Application for Extension of Time to File Information Returns, by the due date of the returns. Employers can also apply for an additional 30-day extension, under certain hardship circumstances.
- A maximum extension of 30 days to furnish statements to employees is available for employers that send a letter to the IRS, postmarked by the date on which statements are due to recipients.
- An electronic reporting waiver can be requested by employers that use Form 8508, Request for Waiver from Filing Information Returns Electronically, at least 45 days before.
In light of the many reporting challenges, many employers are choosing to partner with outside vendors to track and/or report the data for the required filings. For some employers, meeting the requirements for ACA reporting will be considerably more difficult than for others. Determining if you need assistance from a third-party is a critical step to ensure that any looming IRS deadlines are met. There are a number of third-party vendors and payroll providers that offer solutions that will assist you with the information reporting. However, if you have not already entered into a partnership for this type of service, you will need to act quickly. There are some vendors that have already stopped accepting new clients for 2015. Others may still be willing to work with new clients, however, for many the pricing for these services continues to increase as the deadlines rapidly approach.
As with most critical IRS deadlines, procrastinating is never usually helpful and ultimately leads to a very stressful, 11th hour scramble. Remember that these forms are important tax documents so do not hesitate to obtain any needed tax or legal advice that you may need in order to complete them. If you find you may need help pulling your data together or filing your reports, move quickly and take advantage of the resources that are available to you. Don’t let the start of 2016 be anything but a Happy New Year.
This update should not be construed as, nor is it intended to provide, legal advice. You should contact your tax advisor or an attorney who specializes in this practice area, to address questions regarding specific issues.