ACA 1095-C Furnishing Deadline Extended for 2017 Reporting
On December 22, 2017, the IRS issued notice 2018-06 to:
- Extend the due date for furnishing formsunder Section 6055 and 6056 for 2017 30 days, from January 31, 2018 to March 2, 2018; and
- Extend good-faith transition relief penalties related to 2017 information reporting under sections 6055 and 6056.
Of note, there has not been an extension for filing forms with the IRS. That still remains Feb 28, 2018 for paper-filing and April 2, 2018 for electronic.
What does the Good-faith Transition Relief from Penalties Mean?
Good-faith transition relief, in short, is how the IRS puts people at ease that are trying to avoid administrative penalties (incorrect data entry or form coding) while doing their best to code their 1095/1094-Cs correctly. I'm assuming that the IRS is trying to keep their phone lines from blowing up with questions. Nonetheless, you're lucky if you can talk to an IRS support tech after 2 hours on hold.
Specifically, this relief applies to:
- inaccurate tax-payer ID numbers
- Dates of birth
- Line 14-16 coding
It does not apply to employers that fail to make a "good-faith effort" to comply with the regulations, or fail to file information or furnish statements on time.
In other words, if it is March 1, 2018, and you aren't 100% sure that your forms are accurate, and you've made a good-faith effort to complete them accurately, furnish them anyways.
In determining "good-faith" the IRS will take into account whether the reporting entity made reasonable efforts to prepare for reporting the required information ot the IRS and furnishing it to individuals. It will also take into account the processes and procedures that the reporting entity has taken to ensure they are able to report on time.
In other words, if your strategy for complying with the ACA means calling your broker or an ACA outsourcing service in the final hour, it will be difficult to qualify as "good-faith" effort.
What's the Impact of the Extension on Individuals?
Individuals do not have to have their individual return form (1095-C/B/A) with them when tey go to file their 2017 taxes. Once they receive their return form, they should retain it for their personal records. Tax payers may rely on information received from their employer or other coverage provider for purposes of filing their returns. This includes information that will show their entitlement to a tax-subsidy or proof that they were enrolled in Minimum Essential Coverage (MEC) (they had health insurance that meets the ACA standard of MEC) in 2017.