2020 ACA Forms 1094/1095 Reporting Deadline Extended
The Internal Revenue Service (IRS) announced in IRS Notice 2020-76 limited relief for Form 1094/1095 information returns for the 2020 tax year, largely following prior years' guidance:
Deadline for Furnishing Statements to Individuals
An automatic extension of 30-days is provided. As a result, the permissive 30-day extension is not available for the 2020 reporting year.
Original Deadline New Deadline
January 31, 2021 March 2, 2021
IRS Reporting
IRS Reporting is still due on its original dates, with exception of paper filing due on a Monday due to the deadline falling on a Sunday. Filers may extend these deadlines by application to the IRS.
Original Deadline New Deadline
February 28, 2021 (paper) March 1, 2021 (paper)
March 31, 2021 (electronic) March 31, 2021 (electronic)
Good Faith Error Penalty Relief
No penalties will be imposed on entities that report incorrect or incomplete information—either on statements furnished to individuals or returns filed with the IRS—if they made good faith efforts to comply with the reporting requirements. Penalty relief is not available to entities that fail to furnish statements or file returns; miss an applicable deadline; or are otherwise not making good faith efforts to comply.
Evidence of good faith efforts may include:
Gathering necessary data
Transmitting it to a third party to prepare the required reports
Testing the ability to transmit data to the IRS.
According to the notice, 2020 is the last year that the IRS intends to provide good faith relief from penalties for incorrect or incomplete information returns.
Penalty Relief From Furnishing Statements
Code § 6055 requires coverage providers to report enrollment information to the IRS and furnish that information to covered individuals. Enrollment information generally is reported on Form 1095-B, but applicable large employers (ALEs) report enrollment information for employees enrolled in their self-insured health plans on Part III of Form 1095-C. For 2020, the IRS will not assess penalties against reporting entities that fail to automatically furnish Forms 1095-B to individuals so long as:
(1) a Form 1095-B is furnished within 30 days after an individual’s request is received; and
(2) a notice with information about requesting Form 1095-B is prominently posted on the reporting entity’s website. Similar relief applies to ALEs that fail to automatically furnish Forms 1095-C to employees who were not full-time for any month in 2020, so long as the form is furnished on request and the website notice is provided.
The IRS emphasizes that the Section 6055 relief does not apply to an ALE’s full-time employees or to the requirement for coverage providers to file enrollment information with the IRS.
The IRS has released draft 2020 Forms 1094 and 1095 – we will send an alert as soon as final forms are posted.
Conclusion
Be sure to report to the IRS on time. It is far better to submit with errors or missing information than late. Employers should ensure they are tracking and collecting needed coverage data already to ensure submission of required reporting by the due date.
This information is not intended to serve as legal or financial advice. Please consult your legal or tax professional to ensure compliance.