For the second year, the IRS has pushed back a deadline relating to the distribution of Form 1095 to individuals. IRS Notice 2016-70 provides details about the delay.
Deadline to Distribute Form 1095-B and Form 1095-C to Individuals Extended
The original deadline for distributing Form 1095-B and Form 1095-C to individuals was January 31, 2017. The new deadline is March 2, 2017. The extension provides Applicable Large Employers (ALEs), self-insured group health plans, and health insurance carriers more time to populate and distribute the forms. The IRS will not grant additional 30 day extensions.
Filing Deadlines Remain Unchanged
IRS Notice 2016-70 does NOT change the deadlines for filing forms with the IRS. Filers filing fewer than 250 returns may file in paper. The deadline for paper filing is February 28, 2017. Filers filing 250 or more returns must file electronically through the AIR system. The deadline for electronic filing remains March 31, 2017.
Good Faith Compliance Standard Extended to 2016
For 2015, the IRS provided a good faith compliance standard protecting filers from penalties under Code 6721 and 6722. The IRS initially indicated this good faith compliance standard would no longer be available for 2016. However, Notice 2016-70 extends the good faith standard to the 2016 filing cycle as well. This relief applies to missing and inaccurate information required on the forms, but not to forms that are not filed timely.
Individual Income Tax Filings – No Form 1095 Required
The extension means some taxpayers may not receive a Form 1095 before they are ready to file individual income taxes. Taxpayers may rely on other information provided by their employer or coverage provider to determine eligibility for premium tax credits and to confirm Minimum Essential Coverage was maintained for all months of the 2016 tax year. Taxpayers are not required to wait to receive a Form 1095 before filing individual income tax returns.
The Employer Mandate and the ACA’s reporting requirements face an uncertain future. While this extension provides some breathing room for ALEs, the extension of one deadline but not the other may cause confusion for filers. We recommend ALEs use this additional time to ensure forms distributed are accurate and complete, as filers will have less time between the distribution deadline and the filing deadline to make corrections before filing occurs. In the meantime, we will continue to monitor any new developments related to these reporting requirements.