Affordable Care Act (ACA) deadlines have changed again, so it’s a good idea to get your ducks in a row now to make sure you file on time and avoid costly penalties. The good news? The IRS extended the 1095-C employee due date by 30 days, from January 31 to March 2, 2020. Here are all the ACA deadlines for 2020 (reporting year 2019) and the consequences of missing important filing dates.

ACA deadlines 2020 (reporting year 2019)

These are the major ACA deadlines and reporting requirements you need to know for 2020.

ACA Information Reporting Forms 2019 Tax Year Deadlines (forms filed in 2020)
Forms 1094-B, 1095-B, 1094-C and 1095-C due to employees (to be postmarked if mailed or sent by email if applicable conditions met) January 31, 2020 Extended to March 2, 2020
Forms 1094-B, 1095-B, 1094-C and 1095-C due to IRS (if paper filing) February 28, 2020
Forms 1094-B, 1095-B, 1094-C and 1095-C due to IRS (if filing electronically*) March 31, 2020
Late filing deadline for IRS (1094-B, 1095-B, 1094-C and 1095-C) August 1, 2020

*Employers filing 250+ returns must file electronically

ACA reporting updates for 2020

The biggest change is the extension of the employee 1095-B and 1095-C deadline, which the IRS extended 30 days from January 31 to March 2, 2020. This should offer some relief to employers who struggled to meet last year’s January 31 deadline.

Historical employee 1095-C deadlines

2016

(2015 reporting)

2017

(2016 reporting)

2018

(2017 reporting)

2019

(2018 reporting)

2020

(2019 reporting)

January 31, 2016 March 2, 2017 January 31, 2018 January 31, 2019 March 2, 2020

 

Other updates:

  • The IRS extended good-faith relief for reporting, which enables the agency to waive penalties for incomplete or incorrect forms provided employers made a good-faith effort to submit the proper information. NOTE: The IRS will not waive penalties for missed deadlines.
  • The IRS will not extend employee furnishing deadlines beyond the automatic 30-day extension (March 2, 2020). The agency will not respond to requests for additional extensions.
  • The penalty for failing to furnish forms to employees has increased from $260 to $270 per return.

Updated ACA penalties for 2020

Meeting ACA reporting requirements is critical and missing deadlines is costly. Potential penalties exceed six figures, even for small businesses.

Large business ACA penalties (gross receipts exceeding $5 million)

  • Within 30 days of deadline: $50 per return, with a maximum of $556,500
  • 31 days to August 1: $110 per return, with a maximum of $1,669,500
  • After August 1 or failure to file: $270 per return, with a maximum of $3,339,000
  • Intentional disregard: $550 per return, with no limitation
  • Failure to furnish forms to employees: $270 per return

Small business ACA penalties (gross receipts under $5 million)

  • Within 30 days of deadline: $50 per return, with a maximum of $194,500
  • 31 days to August 1: $110 per return, with a maximum of $556,000
  • After August 1 or failure to file: $270 per return, with a maximum of $1,113,000
  • Intentional disregard: $550 per return, with no limitation
  • Failure to furnish forms to employees: $270 per return

Such large penalties underscore the importance of filing on time; however, many businesses find it challenging to understand ACA reporting requirements.

“It can be a bit overwhelming,” says Brian Pfeifer, Payroll Sales Senior Manager at Deluxe. “But if you put in the work ahead of time and don’t wait until the last minute you should be in good shape.”

Of all the ACA reporting requirements, those under Section 6055 and 6056 are among the most difficult. Employers with a self-insured health plan with minimum essential coverage must distribute to enrolled employees and file Form 1095-B. Applicable employers with 50+ full-time employees/equivalents must distribute to enrolled employees and file Form 1095-C. If these employers offer self-insured health plans, they may use Form 1095-C in lieu of Form 1095-B. For IRS filings, Forms 1095-B and 1095-C are accompanied by transmittal Forms 1094-B and 1094-C.

In addition, organizations with 50+ employees/equivalents must insure 95% of full-time employees to avoid penalties. Keep in mind that it’s not 95% per year, it’s 95% per month. The IRS will ask for payroll/benefits data to ensure accuracy.

How to meet ACA reporting requirements

Use these tips to meet ACA reporting requirements.

Keep an eye out for exchange subsidy notices

Large employers should be on the lookout for notices alleging that a full-time employee received subsidized coverage because the employer didn’t provide coverage. Appeals must be submitted within 90 days of receiving the notice. Having a system that tracks benefits will come in handy in such cases.

Work together

HR, the CFO/controller and the accountant/tax adviser should sit down to see that they are in agreement, especially in regard to indicator codes. Involving your payroll vendor will greatly simplify this process.

Revisit compliance tactics

The big question here is whether you are going to do this yourself or outsource it to a third-party vendor. What did you do last year? Did it work? If you used a vendor, was it a good experience or should you explore other options?

Get the ACA Dashboard

Switch to Deluxe Payroll and get the only ACA solution that’s 100% automated and integrated, making it ridiculously easy to evaluate, modify and report compliance instantly. View your complete picture in a snap for easy, real-time monitoring. Additionally, get individual employee tracking, eligibility notifications/early warning alerts, multi-company status management and look-back measurement support.

Are you prepared to close the books on 2019 payroll?

Get the insights you need to wrap up year-end smoothly and easily.

Editor’s note: This blog post was deemed accurate at the time of publication and does not constitute legal or tax advice. Always consult with your tax adviser and/or legal counsel on the regulations and obligations that pertain to your situation.

Was this useful?
0 0
More on this Topic

Avoid headaches while understanding the Affordable Care Act (ACA) filing requirements.

7 min read

Make sure your payroll team is ready with our checklists, answers to frequently asked questions, bank closing schedule and other tips.

8 min read

See why you need a good system that facilitates end-of-year ACA compliance reporting.

10 min read