2016 Deadline For ACA Reporting Extended
The Internal Revenue Service has determined that some employers, insurers and other providers of minimum essential coverage (MEC) need additional time to prepare the 2016 Forms 1095-B and 1095-C to be furnished to individuals. Therefore, IRS Notice 2016-70 extends the due date from Jan. 31, 2017, to March 2, 2017, for furnishing the 2016 Form 1095-B and Form 1095-C.
Despite the delay, employers and other coverage providers are encouraged to furnish 2016 statements to individuals as soon as they are able.
Filers are not required to submit any request or other documentation to the IRS to take advantage of the extended furnishing due date provided by Notice 2016-70. The IRS will not grant additional extensions of time to furnish Forms 1095-B and 1095-C, and will not formally respond to any requests that have already been submitted for 30-day extensions.
Notice 2016-70 also extends transition relief from penalties for providing incorrect or incomplete information to reporting entities that can show that they have made good-faith efforts to comply with the Sections 6055 and 6056 reporting requirements for 2016.
Filing With The IRS
The IRS has determined that there is no need for additional time for employers, insurers and other providers of MEC to file 2016 forms with the IRS. Therefore, Notice 2016-70 does not extend the due date for filing Forms 1094-B, 1095-B, 1094-C or 1095-C with the IRS for 2016. This due date remains Feb. 28, 2017 (if filing on paper) or March 31, 2017 (if filing electronically).
Because the due dates are unchanged, potential automatic extensions of time for filing information returns are still available under the normal rules by submitting a Form 8809. The notice also does not affect the rules regarding additional extensions of time to file under certain hardship conditions.
Employers or other coverage providers that do not meet the due dates for filing and furnishing under Sections 6055 and 6056 are subject to penalties under Section 6722 or Section 6721 for failure to furnish and file on time. However, employers and other coverage providers that do not meet the relevant due dates should still furnish and file. The IRS will take this into consideration when determining whether to abate penalties for reasonable cause.
Extension Of Good-faith Transition Relief From Penalties
The good-faith transition relief applies to missing and inaccurate taxpayer identification numbers and dates of birth, as well as other information required on the return or statement. No relief is provided for reporting entities that do not make a good-faith effort to comply with the regulations; or fail to file an information return or furnish a statement by the due dates.
The IRS does not anticipate extending this transition relief – either with respect to the due dates or good-faith relief from penalties – to reporting for 2017.
Impact On Individuals
Because of the extended furnishing deadline, some individual taxpayers may not receive a Form 1095-B or Form 1095-C by the time they are ready to file their 2016 tax returns. Taxpayers may rely on other information received from their employer or other coverage provider for purposes of filing their returns, including determining eligibility for an Exchange subsidy and confirming that they had MEC for purposes of the individual mandate.
Taxpayers do not need to wait to receive Forms 1095-B and 1095-C before filing their returns. In addition, individuals do not need to send the information they relied upon to the IRS when filing their returns, but should keep it with their tax records.
This blog is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.