March 31 is the Deadline for E-Filing ACA Returns With the IRS
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March 31, 2021, is the deadline for e-filing ACA returns, Forms 1094-C and 1095-C, to the IRS for the 2020 tax year as required by the ACA’s Employer Mandate.
Under the ACA’s Employer Mandate, Applicable Large Employers (ALEs) organizations with 50 or more full-time employees and full-time equivalent employees) 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 Internal Revenue Code (IRC) Section 4980H penalties.
On an annual basis, ALEs must file their ACA information to the IRS to inform the agency of health coverage information offered for the tax year. In Forms 1094-C and 1095-C, the IRS is able to identify the type of coverage offered, to whom it was offered, and how much it cost per individual. Also required under the ACA’s Employer Mandate is the distribution of Form 1095-C to full-time employees, and that includes full-time employees employed for one or more months for a given reporting year. The deadline for distributing the 1095-C forms to your workforce for the 2020 tax year was March 2, 2021 (pushed back by the IRS from January 31, 2021).
Employers that have less than 250 returns to file do have the option to paper file with the IRS, but the deadline to do so was February 28, 2021. Employers that fail to meet the paper and electronic filing deadlines may be able to file an extension with the IRS via Form 8809.
IRS Form 8809, officially titled Application for Extension of Time to File Information Returns, may grant employers a 30-day auto extension on their ACA Forms 1094-C and 1095-C. Employers should note that this form is an application, and your extension may be denied. Be prepared to present a case as to why your organization needs an extension.
Employers that fail to timely file their ACA information with the IRS could be subject to IRS penalty assessments. The tax agency is currently issuing late penalty assessments via Letter 972CG to employers who fail to meet annual ACA IRS deadlines established in IRC section 6721. Additionally, the IRS is in the process of issuing Letters 226J for the 2018 reporting year for employers that failed to comply or accurately file their annual information returns.
As we previously discussed, 2020 ACA reporting would be more difficult than previous years for a number of reasons, including additional state-level ACA reporting. To add to the layer of complexity and responsibilities for employers, March 31, 2021, is also the deadline for state reporting for employers who have operations in California, New Jersey, and Rhode Island.
Failing to meet these ACA state filing deadlines can result in penalty assessments from local and state governments. These penalty assessments are in addition to those associated with the ACA’s Employer Mandate.
If your business didn’t meet the IRS annual deadline for ACA e-filing, or the deadlines associated with state-wide reporting, contact us today to see what we can do about filing for an extension and getting your filings completed all while reducing your potential ACA penalty risk.
If your organization needs assistance identifying ACA penalty exposure this year, contact us to have have an ACA Penalty Risk Assessment performed at no cost to you.
