Was the title of a 1970 soul hit for the Chairmen of the Board. Though your love for ACA information reporting is unlikely to grow as a result, you may need a little more time to get it done. This article responds to multiple requests to review this subject again, in more detail.
Unless you apply properly for extensions, Applicable Large Employer Forms 1095-C (one for each 2015 full-time employee) and Form 1094-C (one for each EIN) must be filed with IRS on paper by February 29, 2016 or must be filed electronically by March 31, 2016. If you will be filing 250 or more Form 1095-Cs, you must file electronically. But those 1095-Cs (or permissible equivalents) are to be furnished to those employees by February 1, 2016. That’s 7.5 weeks from today.
Manually inserting the codes on Form 1095-C lines 14 and 16 can consume as little as two minutes or as much as two hours per Form. Employers with high turnover will be particularly challenged. Managers with resources and foresight outsourced that work months ago to IRS AIR System “Transmitters.” Few who offer that high-end service are still accepting new clients for 2015 reporting. Transmitters still open for new business this season may offer helpful tools but typically require the employer to determine and to insert the proper line 14 and line 16 codes.
Fortunately, the IRS is making allowances for this squeeze. An extension of each deadline is available if properly requested. Filing Form 8809 at least 45 days before the due date of the return is the proper way to seek an automatic, 30-day extension of the IRS filing deadline – i.e., February 29 or March 31. See page 3 of the 2015 Instructions for Forms 1094-C and 1095-C.
Form 8809 won’t help with the February 1 deadline to furnish Form 1095-C to each employee. Here we quote page 4 of the same Instructions:
Extensions of time to furnish statement to recipients. You may request an extension of time to furnish the statements to recipients by sending a letter to Internal Revenue Service, Information Returns Branch, Attn: Extension of Time Coordinator, 240 Murall Drive, Mail Stop 4360, Kearneysville, WV 25430. The letter must include (a) filer name, (b) filer TIN, (c) filer address, (d) type of return, (e) a statement that extension request is for providing statements to recipients, (f) reason for delay, and (g) the signature of the filer or authorized agent. Your request must be postmarked by the date on which the statements are due to the recipients. If your request for an extension is approved, generally you will be granted a maximum of 30 extra days to furnish the recipient statements. For purposes of requesting an extension of time to furnish the statements, the term filer means the ALE Member, or the Designated Government Entity, if applicable.
We have heard this called an automatic extension elsewhere, but the language just quoted does not promise approval or any particular duration of extension if approved. Better ask early, because (again quoting the Instructions, page 4):
- The penalty for failure to file an information return generally is $250 for each return for which such failure occurs. The total penalty imposed for all failures during a calendar year cannot exceed $3,000,000.
- The penalty for failure to provide a correct payee statement is $250 for each statement with respect to which such failure occurs, with the total penalty for a calendar year not to exceed $3,000,000.
- Special rules apply that increase the per-statement and total penalties if there is intentional disregard of the requirement to furnish a payee statement.
However, there’s this glimmer of good news (quoting again, same page):
Relief from penalties. For 2015 reporting, the IRS will not impose penalties on a filer for reporting incorrect or incomplete information if the filer can show that it made good faith efforts to comply with the information reporting requirements for 2015. No relief is provided in the case of reporting entities that cannot show a good faith effort to comply with the information reporting requirements or that fail to timely file an information return or furnish a statement. However, consistent with the existing information reporting rules, reporting entities that fail to timely meet the requirements still may be eligible for penalty relief if the IRS determines that the standards for reasonable cause under section 6724 are satisfied. For additional information on penalty relief, see the sections 6055 and 6056 FAQs at www.irs.gov/ Affordable-Care-Act/Affordable-Care-Act-Tax-Provisions- Questions-and-Answers.
If you are working with an AIR System Transmitter, confirm its receipt of a Transmitter Control Code and communicate clearly about requesting and documenting any extension of either deadline.
December 28, 2015 Update: IRS Notice 2016-4 (just released) extends the February 1, 2016 furnishing deadline to March 31, 2016, extends the February 29, 2016 paper filing deadline to March 31, 2016 and extends the March 31, 2016 electronic filing deadline to June 30, 2016. See our fuller story for the details.