A Little Breathing Room: IRS Extends ACA Reporting Deadline and Good Faith Penalty Relief

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The IRS delivered welcome news to employers gearing up to meet the Affordable Care Act’s (“ACA”) information reporting deadlines for the 2016 calendar year. In Notice 2016-70, the IRS extended the deadline to furnish Forms 1095-B and 1095-C to employees.  The new deadlines are provided below.

  Old Distribution Deadline New Distribution Deadline
Form 1095-B (to employees) January 31, 2017 March 2, 2017
Form 1095-C (to employees) January 31, 2017 March 2, 2017

Importantly, the Notice does not extend the deadline for filing Forms with the IRS.  The deadline to file with the IRS remains February 28, 2016 (for paper filings) and March 31, 2017 (for electronic filings).

In light of this relief, the IRS will not accept automatic or permissive extensions to furnish Forms 1095 to employees.  However, employers may still seek extensions of time for filing with the IRS by submitting Form 8809.

Employers may be relieved to find that the Notice also extends good faith transition relief for ACA reporting for the 2016 calendar year.  As with last year, employers who submit incorrect or incomplete information returns may be relieved from penalties if they can show that they made good-faith efforts to comply with the reporting requirements.

Even given the extended deadline to furnish Forms and the extended good-faith penalty relief, employers may wish to continue to gather the information required to complete, distribute and file their returns as soon as they are ready.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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