On December 29th, the IRS issued a notice which came as a surprise to many employers. The IRS announced an automatic extension of the due dates for the 2015 reporting requirements for the Affordable Care Act (ACA).
The due date for furnishing forms to individual employees has been extended from February 1, 2016 to March 31, 2016.
The due date for filing forms with the IRS has been extended from February 29, 2016 to May 31, 2016. If filing electronically, the due date has moved from March 31, 2016 to June 30, 2016.
As a reminder, the Affordable Care Act requires ALL employers with 50 or more full-time equivalent employees to report what health coverage, if any, that the company provided to full time employees during 2015. Applicable Large Employers are required to report this information to both the IRS and any full-time employees that were employed during the year. There is transitional relief for employers between 50-99 employees, but this only applies to coverage, not reporting requirements.
Although this feels like a gift from the IRS, it is important to continue to stay on task. The extension was granted because the ACA is a complex law with complicated reporting requirements. The Forms 1094 and 1095 require detailed information on the employees and use codes to convey the information.
This extension gives you some breathing room but not full relief. Use these best practices to help guide you during this time:
- Be prepared. Take this extra time and review your filings. Contact your PEO or payroll company and inquire about their progress. The ultimate liability falls on the individual company even if a payroll provider or insurance agent is completing the report. Make sure you understand the final forms.
- Don’t stall. Although it is a relief to have extra time, try to complete the reporting requirements as soon as possible. Do not wait until the final hour. Employees will need their 1095-C in order to complete their individual tax returns. The sooner they receive the form, the better.
- Inform employees. Many employees are not aware that they will need both their W-2 and 1095-C in order to complete their taxes for 2015. Send notice of this to your employees and also inform them of the extension as this will affect their personal tax returns.
Do not let this extension make you lose your focus. The best advice is to continue on your path to ACA reporting compliance as if this extension was never granted.