The IRS has published new rules that will increase the number of employers who must file information returns electronically. Under previous rules, employers that filed more than 250 information returns per year were required to use the IRS electronic filing system. The 250-return threshold applied separately to each type of information return covered under the regulations. Under the new rule, the IRS has reduced the filing threshold to 10 returns. Unlike the previous rule, the new rule requires filers to aggregate all types of returns to determine whether a filer meets the 10-return threshold.
The new rule applies to a wide variety of forms. Since the focus of this blog is on matters related to employee welfare benefits, special mention must go to the 1094 and 1095 series forms. These are the forms used by the IRS to assess shared responsibility penalties under the ACA. Affected employers must use the Affordable Care Act Information Returns (AIR) system for electronic filing.
Also affected is Form 5330, Return of Excise Taxes Related to Employee Benefit Plans. This form is primarily used to report pension plan issues but could apply to a funded welfare benefit plan that provides a disqualified benefit.
The new rule applies for returns that must be filed in 2024.
Penalties for failure to file electronically when required can be as high as $630 per return for intentional disregard of the filing rules.
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. As always, for specific questions concerning your health and welfare plan, or for help in operating your plan during the current COVID-19 crisis, please consult your own ERISA attorney or professional advisor.