On Monday, December 28, 2015, the IRS released Notice 2016-4 extending the due dates under both §§ 6055 and 6056.
Form 1095-B and 1095-C: Statement to Individuals
The due date for furnishing the statements to individuals, in the form for Form 1095-B for insurers and Form 1095-C for ALEs (Applicable Large Employers) has been extended from February 1, 2016 (officially January 31, however, being a Sunday, the due date was February 1 for 2016) to March 31, 2016.
Form 1094-C: Transmittal to the IRS - Paper Filing
ALE paper filing with the IRS, Form 1094-C, has been extended from February 29, 2016 to May 31, 2016.
Form 1094-C: Transmittal to the IRS - Electronic Filing
ALE electronic filing with the IRS, Form 1094-C, has been extended from March 31, 2016 to June 30, 2016.
Previous Extension and Waiver Provisions
Due to these extensions, the previous provisions regarding automatic and permissive extension of time for filing information returns and permissive extensions of time for furnishing statements to individuals will not apply to the extended due dates. Employers who fail to meet the new timeline will be subject to penalties under section 6722 or 6721 for failure to timely furnish and file. For an extensive look at those penalties, please see our ACA Penalties white paper.
If an employer is unable to meet the new deadline, they should still file as soon as possible, as the IRS will take all of the facts and circumstances into account when determining a penalty and whether reasonable efforts were made to complete the reporting in a timely manner. As well, if the timelines will not be met, employers should be prepared to demonstrate what they have in place to ensure timely compliance for the 2016 reporting that will be due in 2017.
Impact on Individual Tax Returns
The IRS has stated that individuals who enrolled in Marketplace coverage and received a premium tax credit, 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 did not receive their Forms 1095-C prior to filing their tax returns.
As a result, individuals who relied on other information from their employers about their offers of coverage for purposes of determining eligibility for a premium tax credit do not need to amend their income tax returns once their receive their Forms 1095-C or any corrected Forms 1095-C.
Additionally, the information proving minimum essential coverage, which individuals are required to have, may also be affected by the extension to furnish individual statements. Due to this, individuals who have not yet received their Forms 1095-B or Form 1095-C can rely on other information received from their coverage providers when filing their 2015 income taxes. Individuals do not need to file amended returns once they receive Form 1095-B or Form 1095-C or any corrections.
Regardless of when Form 1095-B and/or 1095-C are received, individuals should keep them with their tax records.
The notice explicitly states that the extensions apply to the information returns and statements for calendar year 2015 filed and furnished in 2016 only and does not have any impact on future filings. These extensions are automatic and do not require any submission or request. Employers should still work to complete the requirements as soon as possible, as there are no additional extensions that will be provided.
Information contained herein is not intended to constitute tax or legal advice and should not be used for purposes of evading or avoiding otherwise applicable regulatory responsibilities as issued by the federal or state government(s) and/or taxes owed under the Internal Revenue Code. You are encouraged to seek advice from your legal or tax advisor based on your circumstances.