IRS Will Impose No Penalties on Timely Affordable Care Act Filings, Even if Incomplete or Incorrect; Extends Deadline for Employee Notices

by Wendy L. Grabel

The IRS has just announced that it will continue its past policy of imposing no penalties on Employers who make good faith, timely efforts to meet their filing requirements under the the Affordable Care Act (ACA).

Right now, Employers subject to the ACA are scrambling to complete both the complex IRS filings, and the separate information statements that must be sent to employees.

On November 18, 2016, the IRS announced measures that will greatly ease the ACA’s reporting burdens for Employers:

  • For all ACA filings that are required to be made to the IRS in 2017 (regarding the 2016 calendar year), the IRS will generally impose no penalties for incomplete or inaccurate filings, so long as a good faith effort has been made to correctly complete the filings, and provided they are timely filed.
  • This no-penalties policy continues relief granted for filings made in 2016, and extends to all IRS filings and information statements sent to individuals, required under the ACA.
  • For ACA information statements required to be sent to employees regarding the 2016 year, the deadline is automatically extended from January 31, 2017 to March 2, 2017. This extension applies to both Forms 1095-B and 1095-C, sent to employees.
  • No further extensions are available, with regard to these information statements furnished to individuals.
  • As the ACA information statements sent to employees can now be delayed, affected individuals are permitted to file their own tax returns for the 2016 tax year, before these statements are issued. In preparing their own tax returns, employees may rely on information received from their Employers, in order to confirm that they have received Employer-provided minimum essential coverage during 2016.
  • A 30-day extension is available for ACA filings made to the IRS on Forms 1094-B, 1095-B, 1094-C, and 1095-C. Submitting Form 8809 to the IRS is required to receive this 30-day extension.
  • Without the extension, the deadline for ACA filings made to the IRS is February 28, 2017 (or March 31, 2017, if filing electronically).
  • The extension Form 8809 should be filed by these 2/28/2017 or 3/31/2017 due dates. If Form 8809 is being filed to secure extensions on more than one type of filing, the IRS suggests filing multiple Forms 8809.

The IRS announcement of ACA relief, Notice 2016-70, may be found here:  https://www.irs.gov/pub/irs-drop/n-16-70.pdf

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