IRS Extends Deadline to Furnish 1095 Forms to Individuals

Michael BerwangerBy Michael Berwanger, JD, Director, Quality Management & Compliance

The IRS has announced good-faith transition relief for information reporting on Forms 1094 and 1095 for the 2017 tax year, mirroring guidance it provided for the 2016 tax year (see IRS Notice 2018-06 HERE).

Some notable highlights include:

Extension for Furnishing Statements to Individuals. 

The deadline for furnishing Forms 1095-B and 1095-C to individuals is extended by 30 days, from January 31 to March 2, 2018. There is no action necessary from self-funded health plans to take advantage of this extension, it is automatic.

Due to this extension, the discretionary 30-day extension is not available, and no further extensions may be obtained by application to the IRS.

No Extension for Filing Returns with the IRS.

The notice does not extend the due date for filing Forms 1094-B and 1094-C (and accompanying Forms 1095) with the IRS. Accordingly, the deadline remains February 28, 2018, for paper filings, and April 2, 2018, for electronic filings (see 2017 Forms 1094, 1095 B & C Released by IRS).

Please note, electronic filing is mandatory for entities required to file 250 or more Forms 1095. However, filers may obtain an automatic 30-day extension by filing Form 8809 on or before the regular due date.

2017 Forms 1094 1095Good Faith Penalty Relief.

The IRS will again provide penalty relief for entities that can show they have made good faith efforts at compliance.

The IRS reports that no penalties will be imposed on entities that report incorrect or incomplete information, either on statements furnished to individuals or returns filed with the IRS, if they can show they made good faith efforts to comply with the reporting requirements.

The notice specifies that the relief applies to missing and inaccurate taxpayer identification numbers and dates of birth, as well as other required information.

Penalty relief is not available to entities that fail to furnish statements or file returns, miss an applicable deadline, or are otherwise not making good faith efforts to comply.

Evidence of good faith efforts may include gathering necessary data and transmitting it to a third-party to prepare the required reports, testing the ability to transmit data to the IRS, and taking steps to ensure compliance for the 2018 tax year.

ACA deadlinesThose unable to meet the due dates are still encouraged to furnish and file as soon as possible, as the IRS says it will take such furnishing and filing into consideration when determining whether to abate penalties for reasonable cause.

Reasonable cause is distinct from good faith relief and requires, among other things, proof of significant mitigating factors or events beyond the reporting entity’s control.MedCost

MedCost is not a tax preparation company, and you may have additional tax obligations for other benefit plans that you offer to your employees. Please consult with your tax adviser for guidance.

This blog post should not be considered as legal advice.