Late yesterday afternoon, the Internal Revenue Service (IRS) announced it was extending the due dates for certain 2015 Affordable Care Act (ACA) information reporting requirements. The welcome delay gives employers almost two additional months to furnish statements to employees and close to three additional months to file required returns with the IRS.
Specifically, Notice 2016-4 extends:
- the due date for providing individual Forms 1095-C and 1095-B to employees from February 1, 2016, to March 31, 2016
- the due date for filing Forms 1094-B, 1094-C and 1095-C with the IRS from February 29, 2016, to May 31, 2016, if not filing electronically, and from March 31, 2016, to June 30, 2016 if filing electronically
How does the extension impact employees?
The IRS is also providing relief to employees who receive their Form 1095-C or Form 1095-B after they have filed their individual tax returns. Individuals are required to furnish information from their Form 1095-C or Form 1095-B with their individual tax returns to determine eligibility for the ACA premium tax credit and demonstrate compliance with the individual mandate to maintain qualified health coverage. According to the Notice, individuals who rely upon other information received from employers or health coverage providers about their coverage, or offers of coverage when filing their 2015 income tax returns, will NOT be required to amend their return once they receive their Forms 1095-C or 1095-B. As such, employers should not be concerned that providing the Forms 1095-C on the extended timeline will require employees to file amended 2015 income tax returns.
What if an employer fails to meet the new deadlines?
In light of the extended due dates, the IRS states that requests for additional extensions of time to furnish individual statements and or file information returns will not be granted. Employers that fail to meet the extended due states are still encouraged to comply and the IRS states that it will take such filing and furnishing of statements into account when determining whether to abate penalties for reasonable cause. Additionally, the IRS will take into account whether an employer made reasonable efforts to prepare for reporting for 2015 and the extent to which the employer is taking steps to ensure that it is able to comply with the reporting requirements for 2016.