Many employers are getting unwelcome mail from the IRS –Letter 226J- assessing employer shared responsibility penalties. Early reports of employers receiving these letters are that errors made on the 1094-C and 1095-C forms may be the trigger.
Hopefully, these errors can be corrected and many of the penalties will be abated. But, this experience points out how important completion and filing of these forms can be. It is far better to file information correct and timely and avoid having to address an IRS missive demanding penalties!
Employers who fail to file reports timely or with incorrect information will find that doing so will cost more in 2018. Revenue Procedure 2017-58 ups some penalties for 2018.
Scenario Penalty Per Return 2017 Penalty Per Return 2018
Failure to file correct returns $260 $270
Failure to file w/in 30 days of due date $50 $50
Failure to file by August 1 $100 $100
Intentional Disregard $540 $540
These are filing penalties. Employers may also face employer shared responsibility penalties for not offering coverage or for offering coverage which doesn’t meet the affordability standard.
The IRS notice regarding penalties can be found here.