ACA Filing Checklist for 2026: What Employers Should Prepare for Now

The ACA filing deadline for the 2025 tax year is coming up.

December 2025 and early January 2026 are critical times for ensuring ACA compliance. Proactive organizations can easily navigate new federal rules, state-level requirements, and updated affordability thresholds.

Know the 2026 ACA Reporting Deadlines

Federal Deadlines

• Employee Furnishing Deadline (Form 1095-C): March 2, 2026 (Deadline to provide forms to employees through physical mail or electronically).
• Electronic Filing Deadline (Forms 1094-C and 1095-C): March 31, 2026.

Note: The AIRS System Shutdown is occurring Dec. 07, 2025, 12 a.m. ET – Jan. 9, 2026, 9 a.m. ET. No federal filing is possible during this period.

2026 State 1095-C Deadlines

• California: Furnish to employees by Jan. 31; file with the Franchise Tax Board by March 31. Entities have an automatic extension until May 31.
• New Jersey & Rhode Island: Furnish to employees by March 2; file with their respective taxation divisions by March 31.
• Massachusetts: Furnish MA 1099-HC to employees by Jan. 31; file Form MA 1099-HC electronically through the MassTaxConnect portal by March 31. 
• Washington, D.C.: File electronically with the Office of Tax and Revenue by April 30 (Federal furnishing compliance is accepted).

Understanding the Updated Federal Furnishing Rules

The IRS introduced a new federal 1095-C furnishing rule. Employers aren’t required to mail the 1095-C to all employees automatically if they follow specific rules. However, employers are still required to mail 1095-C forms at the employee’s request.

To use the new furnishing rule, you must:

1. Provide a clear, conspicuous, and reasonably accessible notice on the company website or accessible web portal stating the 1095-C form is available upon request.
2. Post the notice by the furnishing deadline (March 2, 2026 for 2025 forms) and ensure it remains accessible until Oct. 15, 2026.
3. Furnish the form within 30 days if an employee requests their 1095-C.

State Exceptions

Federal furnishing rules don’t override state-level mandates. Multi-state employers cannot use the new rule for employees who live in a direct furnishing state like California, New Jersey, and Rhode Island.

Audit Your Data Now

1. Collect Payroll & Hours Data

• Full-time Status Determinations:

• • Look-Back Measurement: Confirm the Standard Measurement Period (SMP) data for 2025. Ensure special unpaid leave (FMLA, USERRA, jury duty, etc.) is credited.
  • Monthly Measurement: Audit to flag employees who have reached 130 hours of service.
• Total Hours of Service: Aggregate payroll hours and check that employees don’t pass full-time eligibility hours.
• Employee Classifications: Review employee classifications (Hourly, Seasonal, Part-Time, Full-Time) for correct status rules.

2. Benefits Enrollment Data

• Coverage Elections: Reconcile payroll deduction data with the benefits administration system.
• Offer-of-Coverage Details: Confirm data supports Line 14 in the 1095-C.
  • Use Code 1A (Qualifying Offer) or Codes 1J/1K (Conditional Offers) where applicable.
• Dependent Coverage Information: Ensure you have names, and either DOB or SSN for every covered dependent.

3. Affordability Calculations

• 2025 Affordability Percentage: The affordability threshold is 9.02%.
  (Note: The IRS raised the threshold to 9.96% for plans in 2026, but for 2025, you must use the 2025 rate)
• Safe Harbors:
  • Federal Poverty Line (FPL): The 2025 FPL Safe Harbor monthly cost limit is $113.84 for plans that renew January 1st and $117.64 for non-calendar plans that start later in 2025. (based on the 2024 Federal Poverty Line of $15,060). Verify your lowest-cost plan didn’t exceed this. 
  • Rate of Pay: Calculate RoP: (Hourly rate x 130 hours) x 9.02%. If an employee has multiple rates of pay in a month (i.e. a higher over time rate, or a mid-month promotion) you must use the lowest rate that was paid to the employee during the month.
  • W-2 Safe Harbor: Use the calculation: (Box 1 Wages x 9.02%). This can’t be finalized until the end of the year.

4. Workforce Changes in 2025

• New Hires: New full-time hires have a penalty-free grace period (the “Limited Non-Assessment Period”). Verify your system uses the correct exemption code (e.g., 2D).
• Terminations: To apply a coverage code, coverage must extend through the month of termination. Audit termination versus coverage dates.
• Leaves of Absence: Under the Look-Back Method, never zero out unpaid FMLA, USERRA, or jury duty; instead, credit hours or exclude the period from measurement.
• Rehire Rules:
  • If employment gap < 13 weeks: Considered a “continuing employee” and eligible for coverage immediately.
  • If employment gap > 13 weeks: Considered a “new hire” with a standard waiting period.

5. Employee Demographics and Data Hygiene

Avoid Common AIRS rejections.

• Special Characters: Apostrophes, periods, and accent marks aren’t allowed. Hyphens are the only accepted special character.
• Address Formatting: Addresses cannot exceed 35 characters. Abbreviate longer words like “Apt,” “St,” etc.
• Correct SSNs/TINs: Mismatches are a large source of AIRS errors.
• Zip Code Validation: Ensure all zip codes are exactly 5 digits. (or 9 with a dash).

Assess Your ACA Penalty Risk Before Filing

Catch issues before they become official penalties.

1. 4980H(a): Confirm you offered Minimum Essential Coverage (MEC) to at least 95% of full-time employees.
2. 4980H(b): Penalties apply if employees receive tax credits and the health plan is unaffordable or does not meet Minimum Value, verify plan details and affordability under a Safe Harbor.
3. The IRS Automated Compliance Validation (ACV) system cross-references your 1095-C filings against tax returns. Possible enforcement letters include:
   • Letter 5699: Inquiry sent to suspected ALEs who failed to file.
   • Letter 226J: Initial ESRP penalty assessment.
   • Letter 227: IRS penalty protest response.
     1. Letter 227-K: Penalty reduced to zero.
     2. Letter 227-L: Penalty revised but not eliminated.
     3. Letter 227-M: Penalty sustained (Next step: IRS Office of Appeals).

Could Filing Errors in 2024 Lead to Audits in 2026? 

Yes. IRS enforcement lags 18-24 months, so 2024 penalties will surface in 2026. Proactively correct data now to avoid fighting a Letter 226J.

How Trusaic Helps Employers Get Filing-Ready Early

ACA compliance is a marathon, not a sprint. ACA Complete® keeps you compliant.

• End-to-End Compliance: The entire lifecycle, from data accuracy to transmission, in one platform.
• Monthly Monitoring: Alerts to problems in real-time.
• Automated Affordability Calculations: Automatically applies Safe Harbors (FPL, Rate of Pay, or W-2) to every applicable employee record.
• Seamless Integrations: Connects with Workday,and UKG.
• State and Federal Filing: Handles all state-level reporting and federal filing.
• Audit Defense: Trusaic provides documentation and expertise to defend your filing and address penalties.

Trusaic can streamline your ACA reporting and eliminate compliance risks before deadlines hit. Schedule a demo today.