Posted on January 7, 2020 by sessionslaw | Categories: Employment
As employers head into the 2020 tax-filing season, the Internal Revenue Service (IRS) is providing new reporting guidance under the Affordable Care Act (ACA). On December 2, 2019, the IRS issued Notice 2019-63. In general, this guidance provides welcome relief for employers. However, because the IRS has been more aggressive recently in assessing ACA-related penalties, employers may want to take particular care to properly prepare all forms and timely file them with the IRS.
Here is what's new:
1. Relief Regarding the Requirement to Furnish 2019 Form 1095-B
2019 is the first year that the individual penalty for not having health insurance is $0. This means individuals will not need the information in Form 1095-B to file their individual taxes. As a result, the IRS has granted relief to reporting entities that fail to issue a Form 1095-B to covered individuals if two specific requirements are met.
First, the reporting entity must post a notice on its website stating that individuals may receive a copy of their 2019 Form 1095-B upon request, along with an email and physical address to which requests may be sent and a telephone number that individuals can contact with questions. Second, the reporting entity must furnish the 2019 Form 1095-B in response to such a request within 30 days of receiving the request. This relief does not broadly extend to applicable large employers that offer self-funded plans and use Form 1095-C to report coverage. Such employers must continue to issue Form 1095-C to all full-time employees. (However, the relief does apply to the requirement to issue 2019 Forms 1095-C to employees who are not full-time employees for any month in 2019).
2. Extension of Due Date to Issue 2019 Forms 1095-B and 1095-C
As it has every year since the ACA became law, the IRS has provided an extension of time to issue Forms 1095-B and 1095-C. Employers now have until March 2, 2020, to furnish full-time employees with 2019 Forms 1095-C. The IRS also announced that it will not grant any additional 30-day extensions for these forms or respond to any requests for such extensions.
Please note that employers are still required to file all 2019 Forms 1094-B, 1095-B, 1094-C, and 1095-C with the IRS by February 28, 2020, for paper forms, or March 31, 2020, for electronic forms, regardless of any penalty relief for failing to furnish forms to covered individuals. Reporting entities are still able to request automatic extensions for filing via Form 8809.
3. Extension of Good-Faith Relief
The IRS also granted an extension of good faith penalty relief for 2019 Forms 1095-B and 1095-C. The relief applies to incomplete or inaccurate information in forms that have been timely filed or furnished.
Have questions about ACA reporting? Don't worry - we are here to help!
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