Monday, December 5, 2016

ACA Tax Reporting Alert


By: Cyndi Moore


Summary
 
  • In Notice 2016-70, the IRS has extended the date on which to furnish copies of the 2016 Form 1095-B or Form 1095-C to employees to MARCH 2, 2017.  
  • The IRS has also extended the "good faith" transition relief from penalties for 2016. 
 
Extension of Date to Furnish 2016 Form 1095-B and Form 1095-C
 

Recognizing that employers and insurers need additional time to prepare Forms 1095-B and 1095-C, the IRS has extended the deadline to furnish copies of the Forms to employees and other covered individuals from January 31, 2017 to March 2, 2017.   

Importantly, the IRS has not extended the deadline to file Forms 1094-C and 1095-C with the IRS.  The Forms must be filed with the IRS by:
 
  • If filing hard copies (less than 250):  February 28, 2017
  • If filing electronically (250 or more):  March 31, 2017
 
As in 2015, employees may rely on other information received from their employer or insurer in preparing and filing their individual Form 1040 income tax return, including confirming that they had minimum essential coverage in 2016.  Employees do not need to wait to receive Form 1095-C or 1095-B before filing their federal income tax returns. 
 

Extension of Good Faith Transition Relief from Penalties for 2016

 
Continuing with its protocol of providing short-term penalty relief for new filing requirements, the IRS has also decided to extend the "good faith" transition relief from penalties under Sections 6721 and 6722 of the Internal Revenue Code for 2016.  The transition relief is available to employers who can show that they have made good faith efforts to comply with the ACA reporting requirements, both as to furnishing Forms to employees and filing with the IRS.  Like the transition relief provided in 2015, the relief is only available for incorrect or incomplete information reported on the Forms.  This would include missing and inaccurate tax identification numbers, dates of birth and other information required on the Forms.  No relief is provided to an employer who fails to file the Forms with the IRS or fails to furnish Forms 1095-C to employees by the due dates. 

 

For more information, please contact Cyndi Moore in the Troy, Michigan office at 248-433-7295.