The upcoming reporting year deadlines for Affordable Care Act information returns for the 2017 tax year are:
- January 31, 2018: deadline to furnish 1095-C schedules
- February 28, 2018: deadline to file 1094-C/1095-C schedules if paper filing
- March 31, 2018: deadline to file 1094-C/1095-C schedules if electronic filing
A new IRS memo provides guidance on the process to complete the Affordable Care Act Information Returns (AIR) for the 2017 tax year. The version 1.0 of XML Schemas, Crosswalks and Business Rules regarding the information reporting of Forms 1094-B, 1095-B, 1094-C, and 1095-C present very minor changes for the 2017 tax year in comparison to the prior year, with the exception of one DIFF file within AIR’s v1.0 Upstream Schema package. The memo can be found here.
When it comes to information reporting for the ACA, data organization is key. Without it, employers may find themselves knee-deep in staggering penalties caused by incorrect or incomplete information reporting or late filings with the IRS. (See IRS Still Moving Forward with ACA Compliance Enforcement for Employers)
Sure, the AIR system was still undergoing development when ACA compliance began, but many inaccuracies in ACA filings are caused by the use of inaccurate data from poor data consolidation practices. Often internal employee information is siloed by various databases for payroll, time and attendance, leaves of absence, health benefits and other employment data, which raises the possibility of data discrepancies and disjointed information. It also can impose an overly burdensome process on staff to extract, aggregate, consolidate and validate the data needed for accurate reporting of ACA information to the IRS.
Companies with structured Human Resources departments should consider ensuring data is accurately monitored and effectively consolidated each month. If HR departments are lacking in resources or expertise, then consider hiring a third-party with the skills, knowledge and resources in data consolidation to help with ACA compliance.
No matter which approach companies take, they should gather and consolidate data monthly so reporting runs smoothly. Make sure this data is accessible to allow pertinent staff the ability to access this information quickly in case of an IRS audit. Such data consolidation is also critical for annual IRS Reporting and forms fulfillment, employee communications about ACA matters, and Exchange Notice appeals.
We’ve learned in years past that the ACA mandates require a bevy of information and best practices for compliance. Perhaps now is a good time to reassess your data collection process for ACA compliance. Do you have the right in-house staff, consultants and technologies in place to properly oversee the necessary data consolidation processes, application of ACA methodologies, and monthly tracking of ACA-related data and documentation?
For more information on the five common challenges companies have to overcome to comply with ACA requirements for the IRS, click here.
