Today, March 31, 2021, is the e-filing deadline for submitting ACA Forms 1094-C and 1095-C to the IRS for the 2022 tax year, as required by the ACA’s Employer Mandate.
Under the ACA’s Employer Mandate, employers with 50 or more full-time employees and full-time equivalent employees, or ALEs must:
- Offer Minimum Essential Coverage (MEC) to at least 95% of their full-time employees (and their dependents) whereby such coverage meets Minimum Value (MV); and
- Ensure that the coverage for the full-time employee is affordable based on one of the IRS-approved methods for calculating affordability.
On an annual basis, ALEs must file their ACA information to the IRS to inform the agency of health coverage information offered for the previous tax year. These requirements allow the IRS to identify details pertaining to the healthcare an organization offers, including who received an offer and how much it cost them. The information documented in the annual Forms 1094-C and 1095-C submission is therefore very important and getting it right is critical for minimizing penalty risk.
As we previously discussed, 2021 ACA reporting would be more difficult than previous years for a number of reasons, including new 1095-C codes and additional state-level ACA reporting requirements. To add a layer of complexity, March 31, 2022, is also the deadline for state reporting for employers who have operations in California, New Jersey, and Rhode Island.
Also required under the ACA’s Employer Mandate is the distribution of Form 1095-C to full-time employees. And that requirement includes furnishing 1095-Cs to full-time employees employed for one or more months for a given reporting year. The deadline for distributing the 1095-C forms to ACA full-time employees for the 2021 tax year was March 2, 2022.
Employers that have less than 250 returns to file do have the option to paper file with the IRS, but the deadline to do so was February 28, 2022.
Organizations that don’t make today’s e-filing deadline, may be able to file an extension with the IRS via Form 8809.
IRS Form 8809, officially titled Application for Extension of Time to File Information Returns, may grant employers a 30-day auto extension on their ACA Forms 1094-C and 1095-C. Employers should note Form 8809 applications are subject to review and not guaranteed. Be prepared to present a case as to why your organization needs more time to file.
Failing to timely and accurately file ACA information with the IRS could subject organizations to IRS penalty assessments.
The tax agency is currently issuing late penalty assessments via Letter 972CG to employers that fail to meet annual ACA IRS deadlines established in IRC section 6721. Failing to file or furnish the annual 1094-C and 1095-C returns altogether could result in penalties via Letter 5005-A.
If your business didn’t meet the IRS annual deadline for ACA e-filing, or the deadlines associated with state-wide reporting, contact us today to learn about your options. We can file an extension for you and get your filings completed all while reducing your potential ACA penalty risk.
To understand your current ACA compliance process, get your ACA Vitals below:
