IRS Provides Limited Relief for Information Reporting

10.12.20

The IRS recently announced that it was extending the issuance deadline for 2020 Form 1095-B and Form 1095-C to March 2, 2021. Due dates for other reporting requirements, such as filing 2020 Forms 1094-B, 1095-B, 1094-C, and 1095-C with the IRS have not been extended (they are March 1, 2021 for paper filings; March 31, 2021 for electronic filings).

Additionally, and reflective of previously released guidance, the IRS commented on its intention to no longer impose a penalty for the failure to provide Form 1095-B to responsible individuals if certain conditions are met. These conditions include posting a prominent notice on the organization’s website with information on how an individual may request a copy of Form 1095-B followed by fulfilling any initiated request within 30 days.

Lastly, the IRS announced that its good faith relief will continue with respect to incorrect or incomplete form filings. No penalties will be imposed on entities that report incorrect or incomplete information-either on statements furnished to individuals or returns filed with the IRS if they made good faith efforts to comply with the reporting requirements.

OUR THOUGHTS.

The form issuance deadline extension is always welcome news given the complex nature of this reporting requirement.  The penalty relief on “B” form issuance is nice in theory but actually delivers very limited impacts to “C” form issuers/filers.  When it comes to the penalty relief for incorrect or incomplete filings, it is important to remember that Applicable Large Employers remain mandated to offer ACA-compliant coverage to full-time employees.  It is within the Employer Shared Responsibility space that we see the IRS actively proposing penalties for non-compliance.  Once notified, it is here where employers face the arduous task of having to explain their reporting and offer of coverage actions to the 4980(H) Response Unit.  See our white paper for very literal case examples that reinforce why ACA compliance remains high on the organizational risk spectrum.  

Baker Tilly Vantagen provides employers and insurance brokers with comprehensive ACA compliance and reporting support services.  These services allow employers to actively manage and monitor compliance with key health insurance mandates (variable hour employee tracking, coverage affordability, 95% offer rule) and back up their actions through sound, timely and accurate annual Form 1094/1095 generation and handling.  Contact Donna Mariotti today to learn more about how we can support or expand your capabilities in these areas.


The information provided here is of a general nature and is not intended to address the specific circumstances of any individual or entity. In specific circumstances, the services of a professional should be sought. Tax information, if any, contained in this communication was not intended or written to be used by any person for the purpose of avoiding penalties, nor should such information be construed as an opinion upon which any person may rely. The intended recipients of this communication and any attachments are not subject to any limitation on the disclosure of the tax treatment or tax structure of any transaction or matter that is the subject of this communication and any attachments.