IRS Extends ACA Reporting Deadline for 1095 Forms

Written by Jessica Adkins

November 28, 2016

According to Notice 2016-70, the due date for businesses and health coverage providers to meet certain 2016 information-reporting requirements under the ACA has been extended 30 days by the IRS.

Notice 2016-70 was issued by the IRS on November 18 and advises the deadline for providing individuals with 2016 forms reporting on offers of health coverage and coverage provided is now March 2, 2017 instead of January 31, 2017. This specifically pertains to Form 1095-B (Health Coverage) and Form 1095-C (Employer-Provided Health Insurance Offer and Coverage.)

The notice states, “Following consultation with stakeholders, the Department of Treasury and the IRS have determined that a substantial number of employers, insurers, and other providers of minimum essential coverage need additional time beyond January 31, 2017, due date to father and analyze the information and prepare the 2016 forms 1095-B and 1095-C to be furnished to individuals.”

Employers with less than 50 full-time employees that offer health coverage, as well as health coverage providers, send Form 1095-B to members of their health insurance plans. The form indicates whether the taxpayer, spouse, and dependents had qualifying health coverage, also known as minimum essential coverage, for some or all of the months during the year. Those with qualifying coverage are not subject to tax penalty.

Form 1095-C, on the other hand, is used by employers with 50+ full-time or full-time equivalent employees. This form indicates whether the employer offered qualified coverage to an employee, spouse or dependents for some or all months during the year.

Despite the new deadline, the IRS urges employers and other coverage providers to submit these forms as soon as possible.

Because of this extension, some taxpayers may not receive their forms by the time they are ready to file their 2016 tax return. Taxpayers may reply on other information received from their employer or other coverage provider for purposes of filing their turns, including the determination for tax credits or subsidies.

“Individuals need not send the information relied upon to the IRS when filing their returns, but should keep it with their tax records,” says the IRS.

There will be no extension on Form 1094-B (Transmittal of Health Coverage Information Returns) and Form 1094-C (Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns). Those returns must be filed with the IRS by February 28, 2017, if not filed electronically, and March 31, 2017, if filed electronically.

The IRS has also indicated that it will extend transition relief from penalties under Code Section 6721 and Section 6722 to reporting entities that have made “good faith efforts” to comply with the 2016 information reporting requirements.

In determining good faith, the IRS has stated they will take into account whether an employer or other coverage provider made reasonable efforts to prepare for reporting the required information to the IRS and furnishing it to employees and covered individuals. In addition, the IRS notice says, “the IRS will take into account the extent to which the employer or other coverage provider is taking steps to ensure that it will be able to comply with the reporting requirements for 2017.”

To read the official notice in its entirety, please click here now.


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