IRS Extends ACA Form Deadlines
Author: Jim Ashley
As the calendar turns to 2016, many organizations remain focused on provisions of the Patient Protection and Affordable Care Act (ACA) first taking effect for calendar year 2015. To monitor compliance with these provisions and assess applicable penalties, Internal Revenue Code (IRC) Section 6056 requires organizations meeting the definition of an applicable large employer (ALE) to report ACA information to the full-time employees and the IRS. Self-insured organizations not meeting the ALE criteria will have a reporting obligation under IRC Section 6055.
The IRS had originally intended for these 2015 forms to share the same filing deadlines as Forms W-2 and 1099. Following consultation with stakeholders, however, the IRS determined that certain employers need additional time to adapt and implement systems and procedures to gather, analyze and report this information. Therefore, the IRS recently released Notice 2016-4, which provides transitional relief for furnishing these informational forms. This notice has a broad impact and will affect employers, coverage providers and individuals.
New Compliance Dates
- Employers must submit Form 1095 to recipients by March 31, 2016.
- All reporting forms for calendar year 2015 must be submitted to the IRS by May 31, 2016, if filing paper forms, or by June 30, 2016, if filing electronically.
Note: Electronic filing is mandatory if submitting 250 or more Forms 1095.
Nonfiling & Late Filing Penalties on Employers
Employers or other coverage providers that don’t comply with these extended due dates remain subject to penalties for failure to furnish and file timely.
Effect on Individual Taxpayers: Premium Tax Credit Through Marketplace
Some individual taxpayers may be affected by the extension of the due date for employers to furnish information on Form 1095-C. Specifically, employees that enrolled in coverage through the Marketplace but didn’t receive a determination that the offer of employer-sponsored coverage wasn’t affordable could be affected by the extension if they don’t receive their Form 1095-C before filing their individual return. As a result, for 2015 only, those who rely on other information received from employers about their offers of coverage for purposes of determining eligibility for the premium tax credit when filing their income tax returns don’t need to amend their returns once they receive Forms 1095-C. Rather, these individuals need to keep these forms with their tax records. However, individuals receiving these forms before filing their returns must use them to assist in preparation.
Effect on Individual Taxpayers: Confirmation of Minimum Essential Coverage
Individual taxpayers who file their returns before receiving their form will be affected by the extended due dates. Before this notice was published, individuals were to use information reported to them on these forms to confirm they had minimum essential coverage. With the extension, individuals might not receive this form by the time they file their 2015 return. Thus, for 2015 only, individuals who rely on other information received from their coverage providers about their coverage for purposes of filing their individual returns don’t need to amend their returns once they receive Form 1095-B or 1095-C. Rather, these individuals need to keep these forms with their tax records. However, individuals who receive these forms before filing their returns must use them to assist in preparation.
While this notice provides welcome relief, it applies to 2015 only, so ALEs and coverage providers should continually evaluate their processes and procedures to file timely in future years.
If you have questions or concerns regarding how the ACA affects your organization, contact your BKD advisor.