IRS Pushes Back Due Date for ACA’s Employer Reporting

The IRS delivered a highly coveted holiday gift to employers when it announced that employers could delay sending 1095-B and 1095-C forms to employees. Notice 2018-06 was published just before Christmas.

The notice allows applicable large employers (ALEs) subject to the ACA filing requirements to furnish the required notices to individuals as late as March 2, 2018 rather than January 31, 2018. The notice advises that individuals do not need to wait for the 1095-B or 1095-C forms if they wish to file their taxes before receiving the notices from their employer or insurer.

Importantly, the notice does not provide relief for filing with the IRS. Employers must still file information returns and transmittals with the IRS before February 28, 2018 or April 2, 2018 if filing electronically. Electronic filers would normally have to file by March 31. However, since March 31 is a Saturday, the due date is pushed to the first business day following the due date.

Good faith transition relief has also been extended to employers filing returns for the 2017 year. The IRS will not impose penalties on reporting entities that have made good-faith efforts to comply with the reporting requirements. This relief is applicable to the “furnishing and filing of incorrect or incomplete information reported on a statement or return.”

Good- faith relief requires that the employer made a good -faith effort to comply with the regulations. It is applied to situations where there is missing or incorrect taxpayer identification numbers, dates of birth or other information on a return. Notably, it does not extend to failure to furnish or timely furnish a statement or return.

Failure to file returns timely or at all can result in significant penalties. Penalties range from $50 to $540 per return. The IRS notice 2017-58 regarding penalties can be found here.

Employers who have not met the due dates to file returns should do so as soon as practicable. The IRS can abate these penalties for reasonable cause. Reasonable cause requires a reporting entity to demonstrate that it acted in a responsible manner and that the failure to file was due to events beyond the reporting entity’s control.

While employers had been asking the IRS for delayed filing, this notice specifically states that such relief is not likely in future years.

The IRS news release explaining the delay can be found here.

IRS Notice 2018-06 can be seen here.

%d bloggers like this: