2 minute read:
The IRS has published various Affordable Care Act Information Returns (AIRs) documents for the 2020 tax year with which employers will need to familiarize themselves before electronically filing for this year.
Last updated on September 10, 2020, the agency made available documents pertaining to Known Issues, Form to Schema Crosswalks, XML Schemas, and Business Rules for the 2020 Tax Year. Of the Form to Schema Crosswalks made available, Forms 1094-B, 1095-B, 1094-C, and 1095-C are included. Regarding the Known Issues 2020 document, the IRS stated that the document would be made available at a later time but will contain information on the known issues, solutions, and workarounds regarding AIRs software.
This information applies to Applicable Large Employers (ALEs), which are employers with 50 or more full-time employees and full-time-equivalent employees, and are required to offer Minimum Essential Coverage (MEC) to at least 95% of their full-time workforce (and their dependents), whereby such coverage meets Minimum Value (MV) and is affordable for the employee, or be subject to IRC Section 4980H penalties as required by the ACA’s Employer Mandate. Such ALEs are required to submit annually the ACA information returns to the IRS. Those ALEs with 250 or more information returns are required to file these information returns electronically.
You can view the new documents, including the Schema Crosswalks for Forms 1094-B, 1094-C, 1095-B, and 1095-B by clicking here.
While technical in nature, this information is incredibly important for employers that electronically file their ACA information with the IRS, because it includes details on how employers should map their software for transmitting ACA information to the IRS, including information on the new 1095-C Codes, namely, Codes 1L through 1S. These new codes relate to individual coverage health reimbursement arrangement (HRAs). They address a new rule issued that allows employers to use individual coverage HRAs to reimburse employees for the cost of health insurance purchased in the health insurance marketplace. You can learn more about these new codes on the instructions page of Form 1095-C, here.
The final forms of Forms 1094-C and 1095-C for the 2020 tax year are available as a reminder. Forms 1094-C and 1095-C are used in combination with the IRS automated Affordable Care Act Compliance Validation (ACV) system to determine whether an ALE owes a payment under the Employer Shared Responsibility Payment (ESRP) provisions under IRC Section 4980H.
The deadline to electronically file for the 2020 tax year is March 31, 2021. (The deadline to paper filing was March 1, 2021.) Automatic 30-day extensions are available if Form 8809 is submitted prior to the deadline.
For assistance in understanding the new schemas, codes, and forms, employers should contact us to learn how ACA Complete can reduce the administrative burden in complying with the ACA’s Employer Mandate.
