As reported in yesterday’s blog, in Notice 2016-4 (the “Notice”), the Internal Revenue Service (the “IRS”) extends the due dates for the 2015 information reporting requirements under sections 6055 and 6056 of the Internal Revenue Code (the “Code”).
Specifically, the Notice extends the due date for 2015 Forms as follows:
(1) for furnishing to individuals the Forms 1095-B and 1095-C, from February 1, 2016, to March 31, 2016; and
(2) for filing with the IRS the Forms 1094-B, 1095-B, 1094-C, and 1095-C, from February 29, 2016, to May 31, 2016, if not filing electronically, and from March 31, 2016, to June 30, 2016 if filing electronically.
In so extending the due dates, the IRS discussed the reporting rules, and provided some transition rules. Here is what the IRS said.
Sections 6055 and 6056 were added to the Code by the Affordable Care Act (the “ACA”) (section 6056 was later amended). Section 6055 requires health insurance issuers, self-insuring employers, government agencies, and other providers of minimum essential coverage to file and furnish annual information returns and statements regarding coverage provided. Section 6056 requires applicable large employers (generally those with 50 or more full-time employees, including full-time equivalents, in the previous year) to file and furnish annual information returns and statements relating to the health insurance that the employer offers (or does not offer) to its full-time employees.
The IRS has designated Form 1094-B and Form 1095-B to meet the requirements of section 6055. The IRS has designated Form 1094-C and Form 1095-C to meet the requirements of the section 6056.
ADDITIONAL DISCUSSION AND TRANSITIONAL RULES
No Automatic or Permissive Extensions of Time. In view of these due date extensions, there is no need for any automatic or permissive extensions of the due dates for filing or providing the required forms.
Penalties For Failures To File. Employers or other coverage providers that do not comply with these extended due dates for the required forms are subject to penalties under section 6722 or 6721 of the Code, for failure to timely furnish and file. However, employers and other coverage providers that do not meet the extended due dates are still encouraged to furnish and file, and the IRS will take such furnishing and filing into consideration when determining whether to abate penalties for reasonable cause. The IRS will also take into account whether an employer or other coverage provider made reasonable efforts to prepare for reporting the required information to the IRS and furnishing it to employees and covered individuals, such as gathering and transmitting the necessary data to an agent to prepare the data for submission to the IRS, or testing its ability to transmit information to the IRS. In addition, the IRS will take into account the extent to which the employer or other coverage provider is taking steps to ensure that it is able to comply with the reporting requirements for 2016.
The Premium Tax Credit. Some individual taxpayers may be affected by the extension of the due date for employers to furnish information under section 6056 on Form 1095-C. Under section 36B(c)(2)(C) of the Code, an employee is not eligible for the section 36B premium tax credit for any month for which the employee is eligible for (e.g., offered) coverage under an eligible employer sponsored plan that provides minimum value and is affordable (or for any month for which the employee enrolls in an eligible employer-sponsored plan, regardless of whether the plan is affordable or provides minimum value). The Form 1095-C generally includes information on the coverage (if any) offered by the applicable large employer to the full-time employee. The information reported will assist the employee in determining eligibility for the premium tax credit.
Most individuals offered employer provided coverage will not be affected by the due date extensions. This is partly because section 1.36B-2(c)(3)(v)(A)(3)) of the Income Tax Regulations provides that an offer of employer-sponsored coverage is generally treated as unaffordable for section 36B purposes if the individual enrolls in coverage through the Marketplace and receives the benefit of advance payments of the premium tax credit based on a determination from the Marketplace that the offer of employer-sponsored coverage is unaffordable. The Notice details individuals who would not be affected by the extended due dates.
Nonetheless, some employees (and related individuals) who enrolled in coverage through the Marketplace but did not receive a determination from the Marketplace that the offer of employer-sponsored coverage was not affordable could be affected by the extension if they do not receive their Forms 1095-C before they file their income tax returns. As a result, for 2015 only, individuals who rely upon other information received from employers about their offers of coverage for purposes of determining eligibility for the premium tax credit when filing their income tax returns need not amend their returns once they receive their Forms 1095-C or any corrected Forms 1095-C. Individuals need not send this information to the IRS when filing their returns but should keep it with their tax records.
Shared Responsibility Payment. Section 5000A of the Code, which was added to the Code by the ACA, generally provides that individuals must have minimum essential coverage, qualify for an exemption from the minimum essential coverage requirement, or make an individual shared responsibility payment when they file their federal income tax return.
Similar to the above, some individual taxpayers may be affected by the extension of the due date for providers of minimum essential coverage to furnish information under section 6055 on either Form 1095-B or Form 1095-C. Individuals generally use this information to confirm that they had minimum essential coverage for purposes of sections 36B and 5000A. Because, as a result of the extension, individuals may not have received this information before they file their income tax returns, for 2015 only, individuals who rely upon other information received from their coverage providers about their coverage for purposes of filing their returns need not amend their returns once they receive the Form 1095-B or Form 1095-C or any corrections. Individuals need not send this information to the IRS when filing their returns but should keep it with their tax records.