The IRS issued a Notice today announcing that it is extending the deadline for distribution of Forms 1095-C. Under the Affordable Care Act, all large employers must complete and distribute a Form 1095-C to any employee who was considered a full-time employee for one or more months of the calendar year. The normal deadline for distributing such forms is January 31st of the following year. After extensive pressure from the industry, the IRS has agreed to give employers a 30-day extension on this deadline for the 2016 calendar year only. This extension means that Forms 1095-C must be distributed no later than March 2, 2017. While this extension is not as long as the extension given last year, it will still be very welcome news to large employers and their vendors who are trying to gather information and prepare their Forms. However, due to this automatic extension, the IRS will not be granting additional 30-day extensions upon request. Therefore, employers must ensure that they distribute their Forms 1095-C to all full-time employees no later than March 2nd.
Unlike last year, the IRS is NOT extending the date for filing Forms 1094-C and copies of Forms 1095-C with the IRS. For employers that are filing electronically, this deadline remains March 31, 2017. For employers who are filing in paper (which is only permissible if you are filing 250 or fewer Forms 1095-C), the deadline remains February 28, 2017.
The notice also extends the good faith transition relief for another year, which is also very welcome news for employers and vendors alike as they continue to digest these complicated reporting requirements. This good faith transition rule provides relief for the reporting penalties to employers that can show that they made a good-faith effort to comply with the requirements, but still had incorrect or incomplete information on their Forms. It is important to note that, like last year, this good faith relief is only available to those employers who timely submitted Forms 1094-C and 1095-C. It is not available for failure to timely furnish or file a Form. Therefore, employers who are still struggling to gather correct information by the deadline should timely file their Forms with the incomplete or incorrect information and correct it later (opposed to filing correct forms late).