ACA Filing Takeaways for The New Year
2 minute read:
As the 2019 tax year winds down, we wanted to let you know that we have curated a list of our most common and relevant ACA filing questions and answers.
We hope you find these to be helpful as you head into 2020 and begin to prepare their ACA filings with the IRS:
Are only full-time employees required to file 1095-Cs?
The full-time employees do not in and of themselves file the 1095-Cs (or 1095-Bs). Rather, it is the ALE that is required to file and furnish 1095-Cs for each of their full-time employees. In addition, if the employer has self-insured coverage, the employer must report on all individuals who were enrolled in the self-insured health plan, including individuals who were not full-time employees, and non-employee individuals (e.g. spouses/dependents). The employer has the option to complete information about non-employee individuals using either Part III of the 1095-C or by using form 1095-B.
What is the TIN Error Reconciliation Process?
The Taxpayer Identification Number (TIN) error reconciliation process is a process to address TIN errors. For example, if the IRS Affordable Care Act Information Returns (AIRS) system indicates that an employer’s filing is “accepted with errors,” a list is provided containing all of the employees with respect to whom a TIN error was noted. This typically occurs due to mismatches in the legal names and social security numbers (i.e., TIN) of those employees. This list should be cross-referenced with the employer’s HR/payroll records, which may be out of date.
Employers should be engaging in the TIN solicitation process to ensure names or social security numbers (SSNs) are up to date. Employers filing 1095-C Schedules that contain incorrect TINs will not be subject to penalties if they comply with the TIN solicitation requirements. See IRS Pub. 1586, p. 10 (identifying the TIN solicitation process for 1095-C Schedules modifying the process in Treasury Reg. 301.6724-1(f)). The IRS is currently issuing late filing penalties to employers in Letter 972CG.
Once the names and SSNs are corrected, the employer will want to use the corrected information for future 1095-C filings. (The IRS does not require the filing of corrections to SSN or name errors alone without any corrections to the amounts identified in the 1095-C).
What kind of documentation is necessary for substantiating ACA reporting?
Supporting documentation may be found in Summaries of Benefits of Coverage and Enrollment Guides, Employee Handbook, Summary Plan Documents, Employee Premium Rate Sheets and/or Acknowledgement of Offer of Coverage.
If the question is specifically focused on payroll, supporting documentation could be a spreadsheet on which relevant payroll data was downloaded for use in determined full-time employee status.
We hope that the information above proves helpful in the New Year and provides some peace of mind that your organizations or clients are ready to submit ACA filings to the IRS with confidence as we enter the New Year.
To learn more about ACA compliance for the 2019 tax year, click here.
For ACA reporting deadlines in 2020 for the 2019 tax year, organizations should review this link for important dates and requirements.
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