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IRS 2020-29

ALEs: Don’t Miss the August 1st Deadline for Reduced Form 1094/1095 Penalties

Have you checked to make sure you timely filed all Forms 1094-C and 1095-C and met any applicable electronic filing requirements for the 2019 tax year? As a reminder, the deadline for filing forms with the IRS was February 28, 2020, if filing by paper, or March 31, 2020, if filing electronically, and employers filing at least 250 forms must file electronically through the IRS ACA Information Return (AIR) system.

Applicable large employers (ALEs), who failed to meet the filing deadlines or failed to file electronically when required can still qualify for reduced penalties by coming into compliance no later than August 1, 2020. Instead of the $270 per form penalty that would otherwise apply, ALEs would only be subject to a $100 per form penalty.

In July 2019, the IRS began enforcing the filing deadlines and electronic filing requirements for such forms filed for the 2017 tax year through the 972CG Notice, and enforcement is expected to continue. Employers receiving the 972CG Notice are afforded an opportunity to request relief, but they must establish that their failure was due to reasonable cause. Employers will always be in a stronger position to establish reasonable cause, and thus avoid penalties altogether, if they can show the steps they took to mitigate their filing failure making the August 1st deadline all the more critical.

Even if you have outsourced these reporting requirements to a third party, the IRS considers employers subject to these reporting requirements ultimately responsible. If you have questions about how ETC Companies can assist you with your Form 1094-C and 1095-C reporting requirements, please contact us at info@etctacking.com.