The IRS recently issued proposed rules that would make permanent and automatic the 30-day extension for furnishing reporting forms for the Affordable Care Act (“ACA”) to individuals. The IRS has also stated that the proposed relief is available for 2021 reporting. This should provide some relief for those Applicable Large Employers (“ALEs”) and health plan providers nervously preparing for the looming January 31, 2022, deadline.
The ACA requires ALEs, employers with over 50 full-time equivalent employees, and small self-funded/level-funded groups, which are employers of less than 50 full-time equivalent employees, to file and distribute specific tax forms. ALEs typically file Forms 1094-C and 1095-C, while providers of health coverage and small self-funded/level-funded groups file Forms 1094-B and 1095-B.
The IRS uses these forms to enforce ACA’s health coverage mandate provisions. The purpose of the forms is to inform the IRS if the employer or coverage provider complied with specific ACA requirements. The IRS also uses the forms to determine if individuals are eligible for tax credits to buy individual coverage.
ALEs and coverage providers must also provide a copy of the applicable 1095 form to employees or covered individuals. The deadline for providing these forms is January 31. Since the enactment of the ACA, a fundamental challenge for filers has been producing them before the January 31st deadline. In recognition of this filing difficulty, the IRS has released annual guidance that grants an automatic 30-day extension for filing the required forms.
This results in a new extended deadline of roughly, March , based on whether it is a leap year and whether the deadline falls on a weekend. However, employers and coverage providers could never depend on receiving the extension as the IRS would announce it at the last minute, usually sometime in late December. Although there has always been an option available to automatically obtain a 30-day extension, it required a filing with the IRS.
The rules, as proposed, would make the 30-day extension permanent and automatic, without the need for filing with the IRS. In effect, employers and coverage providers would be able to take advantage of an automatic 30-day extension even though the filing deadline remains January 31st. Therefore, any employers and coverage providers that deliver the forms, as required, within 30 days of January 31, are still in compliance with their ACA form-filing requirements.
Note that this proposal has not changed the deadline for filing with the IRS. Paper forms must be filed with the IRS by February 28.The deadline for electronic forms is March 31. Employers and coverage providers filing more than 250 forms must file electronically.
HBL has experience in all areas of benefits and employment law, offering a comprehensive solution to all your business benefits and HR/employment needs. We help ensure you are in compliance with the complex requirements of ERISA and the IRS code, as well as those laws that impact you and your employees. Together, we reduce your exposure to potential legal or financial penalties. Learn more by calling 470-571-1007.
Hall Benefits Law, LLC
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