Last December, the IRS gave employers a “holiday gift” in the form of a deadline delay for Affordable Care Act (ACA) reporting. This year the IRS has presented a similar gift a month earlier. However, the IRS isn’t being quite as generous this year and the delay is more limited.
What is delayed?
On November 18, the IRS announced a deadline extension (IRS Notice 2016-70) for organizations required to distribute 2016 Forms 1095-C and 1095-B to individual full-time employees. The deadline was originally set at January 31, 2017. The delay sets the new deadline at March 2, 2017. The IRS granted the delay in response to employers and insurers that need additional time to collect and analyze the information required to complete the forms. Because of this automatic extension for everyone, the IRS is not allowing employers to file for additional deadline extensions to deliver 1095 forms to employees.
The IRS acknowledges that this deadline delay may mean that individuals will receive their 1095 forms after they file their personal income tax returns and therefore will not require taxpayers to attach the 1095 form to their tax returns this year.
Free member webcast: Blueprint for Completing 1095-C Reporting to Make a “Good-Faith Effort“
What is not delayed?
The delay does not include the deadline for submitting Forms 1094 and 1095 to the IRS. Those forms continue to be due on March 31, 2017 for those filing electronically and February 28, 2017 for those who submit 250 or fewer forms and opt to do so using paper forms.
The same IRS notice also extends the “good faith” relief through this reporting cycle. That means employers that submit forms on a timely basis and make a good faith effort to get them right will not be assessed penalties for errors or incomplete forms. The key is to be timely. The good faith relief is available only to those who submit forms before the deadlines.
Do we really need to do this?
Due to the results of the recent presidential and congressional elections, there is much speculation about the future of ACA. Changing or repealing ACA may be high on the priority list for the new administration, but implementing changes may take a considerable amount of time. The ACA law and regulations are currently in force, and until they are repealed or amended you need to comply with these requirements as they are right now. The potential penalties for not doing so are considerable.
The International Foundation will continue to monitor and share any and all developments related to ACA. Stay tuned! We’ll continue to keep you informed in Today’s Headlines and the Legislative Tracker and, of course, here on the Word on Benefits.
Kelli Kolsrud, CEBS
Director, Information Services and Publications at the International Foundation