If you are an Applicable Large Employer (ALE) required to produce 1095-C and 1095-B Health Coverage notifications to your employees, there’s a little good news. The IRS announced last week that it would be extending the deadline for reporting the 2016 1095-B, Health Coverage and the 2016 Form 1095-C Employer-Provided Health Insurance Offer and Coverage from January 31, 2017 to March 2, 2017. This extension also includes good-faith transition relief from section 6721 and 6722 penalties to the 2016-reporting requirements.
Due in large part to the intricate reporting requirements faced by ALEs and the limited time to complete and furnish the documentation, the IRS has granted the 2016 extension. The US Treasury Department and the IRS have determined that there is no similar need to extend the time employers, insurers, and other providers of minimum essential coverage (MEC) to file with the IRS the 2016-employer-related reporting on Forms 1094-B., 1095-B, 1094-C, and 1095-C. Deadlines for Forms 1094-B, 1095-B, 1095-C, and 1095-C remains February 28, 2017, if not filing electronically, or March 31, 2017 if filing electronically. The notice to extend deadlines, does not impact the automatic extension of time for filing returns, which remains available under normal rules by submitting Form 8809
Taxpayers do not need to wait to receive a Form 1095-B or 1095-C before filing their 2016 tax returns. Individuals need not send the document along with their tax filing, but should retain them as part of their 2016 tax records.
Additionally, the IRS notice extends Transition Relief from penalties under sections 6721 and 6722 for eporting entities that can show that they have made good-faith efforts to comply with the information-reporting requirements under sections 6055 and 6056 for 2016. Specifically, the relief applies to documentation that has been submitted to the IRS but is missing information, contains inaccurate tax payer identification numbers, dates of birth or other information required on the return. No relief will be provided for employers who cannot demonstrate or did not make a good faith effort. The IRS will review processes to determine good faith by asking:
· Did the employer make reasonable efforts to prepare for the reporting?
· What steps were created to gather and transmit the data?
· Was there a process established to prepare the date for submission to the IRS? Is the employer a third-party transmitter or is it using a Third-Party Transmitter to process the data, fulfill and distribute the forms and electronically submit documentation to the IRS?
· Is the organization taking steps to ensure that it is compliant and ready for 2017 reporting?
While the extension to March 2, 2017 is a good bit of relief for already stretched human resource managers, procrastination on organizing, reviewing and preparing the proper documentation will only make matters worse come the end of February. Take time now to pull initial offer of coverage reporting and start reviewing your data for any missing information and potential gaps in coverage If you need assistance, reach out now to your payroll, benefits and small business consultant for guidance.
To find a trusted accountant in your area, visit www.SmallBizAccountants.com.
Please be advised that, based on current IRS rules and standards, any advice contained herein is not intended to be used, nor can it be used, for the avoidance of any tax penalty that the IRS may assess related to this matter. Any information contained in this article, whether viewed or subsequently printed, cannot be relied upon as qualified tax and accounting advice. Any information contained in this article does not fall under the guidelines of IRS Circular 230.