IRS delays ACA reporting deadline
The Internal Revenue Service gave employers a 30-day extension to complete the Affordable Care Act’s information-reporting requirements in an unexpected announcement Monday.
Employers normally have until Jan. 31 to distribute Form 1095, which “dictates eligibility for subsidies under ACA,” to their employees, says Stephen Bowers, an attorney with Philadelphia law firm Cozen O’Connor. Employers will now have until March 2 to complete their reporting obligations.
“The IRS is just acknowledging that this is a lengthy administrative process,” Bowers says.
Because the IRS granted an across-the-board extension to all employers, it will ignore any company-filed extension requests.
The extension applies for tax year 2016 only and does not change the deadline for filing Forms 1094 and 1095, according to the IRS notice.
In the 10-page notice, the IRS also noted that it will extend its “good faith transition relief” for the 2016 reporting year.
In 2015, the IRS did not penalize employers who submitted incorrect or incomplete 1095-B and 1095-C forms as long as those companies could show they made a good effort to comply with the reporting requirements.
With employers and advisers alike speculating about the future of the ACA in light of President-elect Donald Trump’s victory, the deadline extension might provide some peace of mind.
While Trump ran on promises to dismantle the ACA, it is unclear whether he and the Republican Party will act on it.
Though the future is unclear, the IRS announcement might spark a trend in the coming months, industry insiders note.
“This may be the first trickle of something occurring,” Bowers says.