Deadline to Furnish ACA Form 1095-C is Today
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Will you make it?
The deadline for employers to distribute 1095-C forms to their full-time workforce is today, March 4.
This deadline applies to employers with 50 or more full-time employees and full-time equivalent employees, which the IRS refers to as Applicable Large Employers or ALES. Many employers have started to furnish 1095-C forms to their employees despite the extended deadline being available. (The original deadline was January 31, 2019).
Organizations should note that today also is the deadline to furnish Form 1095-B to employees. This form can be used by employers with self-funded insurance programs.
Failing to meet today’s deadline could result in significant penalty assessments from the IRS.
For the 2018 tax year, employers with average gross receipts of more than $5 million in the last three years can face a range of penalties under IRC Section 6722 for failing to furnish 1095-C forms to full-time workers by today’s deadline:
• Distributing forms no later than 30 days of the deadline, they could be subject to a $50 penalty per return, not to exceed an annual maximum of $556,500.
• Distributing forms between April 4 and August 1, the amount per return increases to $110, not to exceed an annual maximum of $1,669,500.
• Distributing forms after August 1 results in a penalty of $270 per return, not to exceed an annual maximum of $3,339,000. For intentional disregard, meaning the deadline was missed willfully, the penalty more than doubles after August 1 to $540 per return, and there is no annual maximum limit.
The per return penalty are the same for employers with average gross receipts of $5 million or less in the last 3 years. However, the annual maximums are lower.
In addition to the IRS issuing ACA penalties under IRC Section 6722 for failing to furnish 1095-C forms to full-time employees and under IRC Section 6721 for failing to file 1094-C/1095-C forms to the IRS by identified deadlines (electronic filings are due by April 1, 2019), the agency is issuing penalties to employers identified as having failed to comply with the ACA’s Employer Mandate under IRC Section 4980H.
Under the ACA’s Employer Mandate, Applicable Large Employers 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 penalties. These penalties are being issued in IRS Letter 226J.
Organizations should elect to have a cost-free ACA Penalty Risk Assessment performed to determine their potential exposure to IRS penalties being issued for ACA non-compliance. It could save you millions of dollars.
Don’t miss any other important 2019 ACA filing deadlines for the 2018 tax year. To get a helpful infographic, click here.
To learn more about ACA compliance in 2020, click here.
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