January 20, 2020

IRS Extends ACA Reporting Deadlines, Provides Penalty Relief for Good-Faith Compliance

The Internal Revenue Service (IRS) released Notice 2019-63 to extend the due dates for reporting and furnishing requirements under sections 6055 and 6056 of the Internal Revenue Code (Code). The Notice also provided penalty relief for these requirements if certain conditions are met.

Background

Sections 6055 and 6056 were added to the Code by the Affordable Care Act (ACA), which require health care providers (e.g., health insurance issuers, self-insured plans, other providers of minimum essential coverage, etc.) and applicable large employers (i.e., generally employers with 50 or more full-time employees) to distribute to employees and report to the IRS information relating to health insurance.

These reporting entities must use Forms 1095-C, 1094-C, 1095-B, and 1094-B to report the above information. See our previous blog for a recap on these forms.

Key Points from The Notice

  • Transmittal Form Deadlines. The deadlines to file the transmittal forms with the IRS are February 29, 2020, or March 31, 2020, if required to file electronically (250 or more information returns). Filers may complete Form 8809 to request an extension of time to file Forms 1095-B, 1094-C, and 1095-C.
  • Extension of Due Date for 1095-B and 1095-C. In order to gather and analyze the information to prepare 2019 Forms 1095-B sand 1095-C, the Notice extends the due date of employer and insurers to furnish these forms to employees from January 31, 2020, to March 2, 2020. Due to this extension, an additional 30-day extension will not be available.
  • Relief for Furnishing Form 1095-B. Since the individual shared responsibility payment was reduced to zero, individuals don’t need Form 1095-B to file taxes with the IRS (see our previous blog for a recap). Reporting entities required to furnish this form to individuals will not be penalized for failing to furnish these forms as long as the following two conditions are met:
    • Post a notice prominently on its website stating individuals may request a copy of their 2019 Form 1095-B. The notice must be accompanied by an email address, physical address, phone number, etc.; and
    • The reporting entity must furnish the form within 30 days of the date the request is received.
  • Relief for Good-Faith Reporting and Furnishing Mistakes. The Notice extends penalty relief to reporting entities that input incorrect or missing information (e.g., tax identification numbers, dates of birth, etc.) on the forms but can show they made good-faith efforts to comply with the reporting and furnishing requirements. Reporting entities that fail to file an information return or furnish a statement by the due dates are ineligible for relief.
  • Request for Comments. The Notice requests comments from taxpayers and reporting entities on whether the extensions discussed will be necessary for future years. Information on how to submit these comments may be found on page 10 of the Notice.

 

The information and content contained in this blog post are for general informational purposes only, and does not, and is not intended to, constitute legal advice.

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