With the employer-related reporting deadline for individual employees fast approaching, the IRS issued Notice 2016-4 on Monday, December 28, 2015. The original deadline for furnishing Forms 1095-B and 1095-C to individuals was Monday, February 1, 2016. However, the IRS officially extended the due dates for filing the 2015 forms with both the required individuals and the IRS. This was likely the result of taxpayer issues collecting and organizing the requisite information during this transitional period, but please note that the original deadlines are still in effect for tax years 2016 and forward.
Applicable large employers (ALE), health insurance issuers, self-insured employers, government agencies, and any other entity that provided minimum essential coverage to individuals during 2015 now have almost two additional months to issue Forms 1095-B and 1095-C to individuals. Per the notice, Forms 1095-B and 1095-C must now be distributed by Thursday, March 31, 2016 (the previous deadline was Monday, February 1, 2016).
Moreover, the notice extends the deadline for filing Forms 1094-B and 1094-C with the IRS for an additional three months. If not filing electronically (e.g. by mail), taxpayers must submit the forms to the IRS by Tuesday, May 31, 2016 (the previous deadline was Monday, February 29, 2016). If filing electronically, taxpayers must submit the forms to the IRS by Thursday, June 30, 2016 (the previous deadline was Thursday, March 31, 2016).
A previous Pugh publication defined applicable large employer and provided details for determining applicable large employer status. Click HERE to view the Employer Mandate article.
PENALTIES AND INTEREST
The IRS also reiterated in Notice 2016-4 that employers who fail to meet the extended deadlines will still be subject to penalties, although the IRS tempered its statement by reminding employers that penalties for late returns may still be abated for reasonable cause such as difficulties beyond the entity’s control. Currently, the penalty under the Affordable Care Act for failing to submit a required return could be as much as $250 for each return (not to exceed $3,000,000 per year).
This is the third part in our ACA Update Series. To read prior articles, click HERE.