The IRS has, once again, come out with a holiday gift for employers, but this year it came early (compared to last year). In the recently-released Notice 2018-94, the IRS provided additional reporting relief for employers for the 2018 calendar year. In short, the Notice provides:
- The due date for providing Forms 1095-C or 1095-B to employees and individuals is extended 32 days to March 4, 2019.
- March 2, 2019 (which would be a 30-day extension) is a Saturday, so the deadline is extended to the following Monday, per tax rules.
- The IRS will not grant an additional 30-day extension beyond this deadline. Even with this extension, the IRS specifically encouraged employers and other coverage providers to send the Forms to employees and individuals as soon as possible.
- The IRS also said that, if an employer submitted a request for a 30-day extension to furnish these forms, the IRS will not respond to that request since it is now moot.
- Good faith penalty relief is also extended for the 2018 forms.
- This means that employers and coverage providers who work in good faith to complete the forms will not be assessed penalties due to missing or inaccurate information.
- The good faith penalty relief only applies to the information in the forms, not to meeting the deadlines for providing or filing the forms.
- In determining good faith, the IRS will take into account whether the employer or coverage provider made reasonable efforts to prepare for the reporting requirements, such as gathering and transmitting the data to appropriate parties. The IRS will also take into account the employer’s or coverage provider’s efforts in preparing to report about health coverage for 2018 by the 2019 IRS deadline.
- Notably, the deadline for filing the forms with the IRS is not extended.
- Therefore, employers filing by paper must submit their forms to the IRS by February 28, 2019.
- Those filing electronically have until April 1.
- As a reminder, employers and coverage providers who are filing more than 250 of these reporting forms are required to file electronically.
This is an unexpected and welcome gift for many employers and coverage providers. However, even with this relief, employers should continue to focus on making sure reporting is accurate and timely. While the deadline extension and good faith relief will help an employer avoid penalties, late or inaccurate forms leave employees with insufficient information to complete their own tax returns. This could lead the IRS to issue a Letter 226J a year or two down the road creating additional headaches at that time. HUB will continue to monitor the ACA reporting developments and keep you apprised as the law evolves.
NOTICE OF DISCLAIMER
The information herein is intended to be educational only and is based on information that is generally available. HUB International makes no representation or warranty as to its accuracy and is not obligated to update the information should it change in the future. The information is not intended to be legal or tax advice. Consult your attorney and/or professional advisor as to your organization’s specific circumstances and legal, tax or other requirements.