The delay in reporting deadlines announced by the IRS in late December has given many employers much needed breathing room. IRS Notice 2016-4 issued on December 28, 2015 extending the filing deadlines for ACA reporting.
Employers subject to the reporting requirements face a deadline of March 31, 2016 to furnish 1095-C statements to each full-time employee. The original deadline was February 1, 2016. Information returns are due to the IRS by May 31, 2016 if filed by paper and June 30, 2016 if filed electronically. The original filing dates were February 28, 2016 for paper and March 31, 2016 for electronic filing.
The delay in filing means that employees may not have received the forms 1095-C from their employers. CMS Fact Sheet on Preparing for Tax Season notes:
This year, many consumers with coverage from a non-Marketplace source will receive a new form in the mail called a Form 1095-B or a Form 1095-C, describing the coverage they had for the year. This form will be sent by their employer, insurance company, or the government program that provides their coverage, such as Medicare or Medicaid. Consumers do not need to attach this information to their tax return or wait to receive the form before filling their tax return. If consumers do receive one of these forms, they should keep it in a safe place with their other tax records.
The CMS Fact Sheet can be found here.
Those employers who take advantage of the filing delay should expect that some employees, or former employees, will have questions regarding tax filing. The CMS Fact Sheet may be worth sharing with them.
Employers should note that the IRS views these delayed filing dates as the sole extensions for this year’s filings. Notice 2016-4 specifically warns that provisions regarding automatic extensions or permissive extensions will not apply to the extended due dates. The notice further warns that employers or other coverage providers that do not comply may be faced with penalties. Notice 2016-4 can be found here.
In a separate notice, penalties for late filing have been increased – again. Civil penalties that apply for ACA reporting purposes are subject to adjustment for inflation. The penalties for ACA reporting are governed by section 6721 and 6722 of the Internal Revenue Code.
The increases were announced in Revenue Procedure 2016-11 for taxable years beginning in 2015. The new amounts are:
Failure to file correct, complete statements on time
$260 per form, not to exceed $3,178,500
$50 per form if corrected within 30 days of filing
$100 per form if corrected within 60 days on or before August 1, 2016
$520 per form for intentional disregard with no limit cap
The Revenue Procedure 2016-11 can be found here.