While we have been hearing and talking about the employer mandate for many months now, the impending tax season makes it all the more crucial to really understand the law (IRS sections 6055 and 6056) and how to stay in compliance. In part one of this two-part series, we looked at reporting information, forms, and who needs to comply with reporting requirements. In part two, we will look further into methods of reporting, deadlines, and penalty relief.
How do organizations report?
The general method of reporting is to use IRS Form 1095-C*, Form 1094-C*, Form 1095-B,* and Form 1094-B*. However, a substitute form may be used so long as they include the same information and satisfy the IRS’s form and content requirements.
There are also two alternative methods to reporting: certification of qualifying offers and 98 percent offers (found under Methods of Reporting). A qualifying offer is when minimum essential coverage is offered to an employee, spouse, and dependents for all 12 months of the year, and which does not exceed 9.5% of the single federal poverty line (per month). A 98 percent offer is when affordable health coverage is offered to at least 98% of an ALE’s full time workforce and dependents for all 12 months of a calendar year.
When do forms need to be filed?
Forms 1095-C, 1094-C, 1095-B, or 1094-B must be filed with the IRS by February 29, 2016 if not filing electronically. For organizations filing electronically, Forms 1095-C, 1094-C, 1095-B, or 1094-B must be filed with the IRS by March 31, 2016.
What penalty relief is provided?
ALEs with between 50-99 full-time equivalent employees qualify for relief from the employer shared responsibility provision for the 2015 tax year (subject to certain conditions). ALEs with 100+ employees are subject to the employer shared responsibility provision but penalty relief may be granted to organizations that can show attempts to comply with regulations in good faith.
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The information and materials herein are provided for general information purposes only and are not intended to constitute legal or other advice or opinions on any specific matters and are not intended to replace the advice of a qualified attorney, plan provider or other professional advisor. This information has been taken from sources believed to be reliable, but there is no guarantee as to its accuracy. In accordance with IRS Circular 230, this communication is not intended or written to be used, and cannot be used as or considered a ‘covered opinion’ or other written tax advice and should not be relied upon for any purpose other than its intended purpose