Earlier this week, the IRS announced it would be extending the 2019 ACA reporting deadline. Originally due January 31, 2020, ACA reporting forms will now be due to employees and other covered individuals on March 2, 2020. However, the deadline to file with the IRS has not changed. Paper filings are due February 28, 2020 while electronic filings are still due March 31, 2020.
The agency has not yet finalized ACA reporting forms such as the 1094B/C and 1095-B/C. Furthermore, the IRS has also authorized transition relief for those filing B forms. You can view the full IRS statement here.
Changes Affecting ACA Reporting Deadline
As noted above, the reason for the March 2, 2020 extension is mainly due to the IRS not yet finalizing its reporting forms. ACA reporting requirements are set out under Sections 6055 and 6056 of the Internal Revenue Code. The sections outline the various requirements involved in ACA reporting—most notably, what organizations must file what and when. In broad terms, companies with 50 or more full-time or full-time equivalent employees are required to file with the IRS as well as provide covered individuals the months in which they were insured.
The IRS is reevaluating how these forms should change after the repeal of the individual mandate included in the Tax Cuts and Jobs Act passed by Congress in December 2017. Most notably, the IRS has issued transition relief for those filing a B Form. The IRS will not issue penalties for organizations that fail to furnish the forms to covered individuals for the 2019 tax year. However, to obtain this transition relief, organizations must meet the following criteria. The healthcare coverage provider must post a notice on its website letting individuals know their B Form is readily available upon request at any time, and these forms are provided with 30 days of the request.
Removal of 30-Day ACA Reporting Extension
While more time to file and furnish 1094-B/C and 1095-B-C forms will hopefully alleviate the pressure for some organizations, the IRS did include a caveat that it would no longer honor the traditional 30-day filing extension. The official IRS statement mentioned above notes:
“Because the extension of the due date to furnish information statements to individuals granted in this notice applies automatically and is as generous as the permissive 30-day extension of time to furnish 2019 information statements under sections 6055 and 6056 that may be requested by some reporting entities in submissions to the” Service, the Service will not formally respond to such requests.”
In other words, because the filing deadline has moved back 30 days for everyone, the IRS believes it provides ample to file and furnish and will therefore not grant the same extensions it has in the past.
Given the new deadlines, organizations that do not file on time will have more difficulty avoiding penalties. The IRS will analyze the reasonable cause and determine whether a valid attempt was made to prepare forms and file on time.
Good Faith Compliance Standard Remains
While the ACA reporting deadline has shifted, the IRS noted that its good faith compliance standard will be renewed. The IRS will not assess a penalty if information on reporting forms is incomplete or incorrect, as long as the filing organization demonstrates it completed the forms in good faith. This only applies to forms filed on time.
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