Stop me if you've heard this one - an ACA-related deadline has been extended. In IRS Notice 2016-70 (available at https://www.irs.gov/pub/irs-drop/n-16-70.pdf), released on November 18, 2016, the IRS once again extended the deadline by which large employers must distribute a Form 1095 to their full-time employees from January 31, 2017 to March 2, 2017. In brief, the ACA requires large employers to complete two forms: a Form 1094, which is filed with the IRS; and a Form 1095, which is distributed to full-time employees. Significantly, this extension applies only to the Form 1095 employee distribution requirement; it does not extend the Form 1094 IRS reporting requirement. In light of the new and improved deadlines, the 2017 reporting requirements for large employers are below:
February 28, 2017: (if filing with the IRS by mail) Must file a Form 1094-B or -C, along with each and every Form 1095-B or -C, with the IRS
March 2, 2017: Must distribute a Form 1095-B or -C to each and every full-time employee
March 31, 2017: (if filing with the IRS electronically) Must file a Form 1094-B or -C, along with each and every Form 1095-B or -C, with the IRS
One could argue that the actual deadline for completing the Form 1095-C is February 28, 2017 for many employers, since the deadline for filing Forms 1095-C with the IRS for employers who plan to file with the IRS by mail remains February 28, 2017. If one were to make that argument, one would have a pretty good point ... but I digress. The extension really is great news for all large employers, and demanding consistency from the IRS is akin to demanding that lawyers not complain about the IRS or demanding that my daughter look where she's going to avoid walking into a literal wall and spilling her milk everywhere, which is a thing that she actually did this morning. We tested her eyesight and it's fine, so I don't know what to do. Also, per the IRS, large employers "are encouraged to furnish 2016 statements as soon as they are able," so feel free to distribute the Forms 1095 early if you feel like it.
Notice 2016-70 also extends the "good faith transition relief" that applied to the 2015 reporting requirements to 2016. As a result, the IRS will not penalize employers for submitting or distributing incorrect or incomplete Forms 1094 and 1095 if they can show they made good-faith efforts to comply with the reporting requirements. Notably, the relief applies to large employers that file forms with "missing and inaccurate taxpayer identification numbers and dates of birth, as well as other information required on the return or statement"; it does not apply to large employers "that fail to file an information return or furnish a statement by the due dates."
Questions? Suggestion for a future ACA FAQ of the Month? Please contact Attorney Peter E. Hansen at (630) 377-1554, or email [email protected].