United States: Extension For Good-Faith Reporting And 2016 Forms 1095-C And 1094-C

Summary

On November 18, 2016, the Internal Revenue Service issued Notice 2016-70, extending both the due date for furnishing individuals with Forms 1095-C and 1095-B, in addition to certain good-faith transition relief to the 2016 information reporting requirements under Code sections 6055 and 6056.

In Depth

The Affordable Care Act (ACA) created information reporting requirements for certain large employers and issuers of health insurance coverage under Sections 6055 and 6056 of the Internal Revenue Code (Code). On November 18, 2016, the Internal Revenue Service (IRS) issued Notice 2016-70 (Notice) extending the due date for furnishing individuals with Forms 1095-C and 1095-B. Code sections 6055 and 6056 allow the IRS to grant extensions of time of up to 30 days to furnish Forms 1095-B and 1095-C for good cause. The automatic 30-day extension is from the original due date of January 31, 2017, to March 2, 2017. The IRS has not automatically extended the deadline for employers, insurers and other providers of minimum essential coverage (MEC) to file with the IRS the 2016 Forms 1094-B, 1095-B, 1094-C and 1095-C. The deadline for filing these forms with the IRS continues to be February 28, 2017, or March 31, 2017, if filing electronically.

Notice 2016-70 also extends certain good-faith transition relief to the 2016 information reporting requirements under Code sections 6055 and 6056. Pursuant to the Notice, the IRS will not impose penalties under Code sections 6721 and 6722 on reporting entities that can show they made good-faith efforts to comply with these information-reporting requirements.

Background

The ACA created reporting requirements under Code sections 6055 and 6056. Code section 6055 requires health insurance issuers, self-insuring employers, government agencies and other providers of MEC to file and furnish annual information returns and statements regarding coverage provided. Section 6056 requires an applicable large employer (ALE) to report, on IRS Forms 1094-C and 1095-C, information about offers of health insurance coverage to full-time employees (FTEs) and the provision of MEC to individuals. For 2016, an ALE is generally an employer with 50 or more FTE equivalents. Under Code section 6056, an ALE must annually file with the IRS a report listing the offers of coverage made to its FTEs and enrollment during the reporting year, and must furnish a related statement of such coverage information to its FTEs.

Notice 2016-70 extended the deadline for furnishing Forms 1095-B and 1095-C to individuals. However, for 2016, the filing deadline for filing Forms 1094-B, 1095-B, 1094-C and 1095-C with the IRS has not been extended, as it was in 2015.

The preamble to regulations under Code sections 6055 and 6056 provide that, for reporting of 2015 offers and coverage, the IRS would not impose penalties under Code sections 6721 and 6722 on reporting entities that could show they made good-faith efforts to comply with the information-reporting requirements. This relief applied only to furnishing and filing incorrect or incomplete information reported on a statement or return, and not to a failure to timely furnish or file a statement or return. IRS Notices 2015-87 and 2015-68 reiterated and provided additional guidance on the 2015 relief. Similarly, this relief has been extended to the 2016 filings.

Forms 1095-C and 1095-B Extension

Section 6056 requires an ALE to report, on IRS Forms 1094-C and 1095-C, information about offers of health insurance coverage to FTEs and the provision of MEC. Notice 2016-70 provides an automatic 30-day extension from the original due date of January 31, 2017, to March 2, 2017, for furnishing individuals with these forms. The IRS has indicated that it will grant no further extensions beyond the revised March 2, 2017, due date. Nevertheless, the IRS is encouraging employers and other coverage providers to furnish the 2016 statements as soon as administratively feasible. The IRS will also not formally respond to extensions that have already been requested by reporting entities.

It is important to note that the due date for health coverage providers and employers to file the 2016 Forms 1094-B, 1095-B, 1094-C and 1095-C with the IRS has not been extended and remains February 28, 2017, or March 31, 2017, if filing electronically. Automatic extensions will still be available by filing a Form 8809. Employers and other coverage providers that do not meet the relevant due dates for filing the 2016 Forms 1094-B, 1095-B, 1094-C or 1095-C with the IRS should still furnish and file. The IRS will take such furnishing and filing into consideration when determining whether to abate penalties for reasonable cause.

Good-Faith Transition Relief

Notice 2016-70 also extends good-faith transition relief from penalties under Code section 6721 and 6722 to the 2016 information-reporting requirements under Code sections 6055 and 6056. This relief previously applied only to incorrect and incomplete information reported on the statement or return, and not to a failure to timely furnish or file a statement or return. Nevertheless, the IRS has extended this relief also to information-reporting requirements under Code sections 6055 and 6056 for 2016.

To qualify for the relief, reporting entities must show they have made a good-faith effort to comply with the information-reporting requirements under Code sections 6055 and 6056 for 2016 (both for furnishing to individuals and for filing with the IRS) for incorrect or incomplete information reported on the return or statement. This relief applies to missing and inaccurate taxpayer identification numbers and dates of birth, as well as other information required on the return or statement. In determining good faith, the IRS will take into account whether an employer or other coverage provider made reasonable efforts to prepare for reporting the required information to the IRS and furnished it to employees and covered individuals, such as gathering and transmitting the necessary data to an agent to prepare the data for submission to the IRS, or testing its ability to transmit information to the IRS. Also relevant to the IRS in granting good-faith transition relief is the extent to which the employer or other coverage provider is taking steps to ensure that it will be able to comply with the reporting requirements for 2017.

Steps for Employers and Other Coverage Providers

Similar to 2015, if an employer takes advantage of this extension, some individual taxpayers may not receive a Form 1095-B or Form 1095-C in time to file their 2016 tax return; thus, communicating the extension to individuals is important. Individual taxpayers may rely on other information received from their employer or other coverage provider for purposes of filing their tax returns, including determining eligibility for the premium tax credit under Code section 36B and confirming that they had MEC for purposes of the individual mandate under Code sections 36B and 5000A. Taxpayers do not need to wait to receive Forms 1095-B and 1095-C before filing their tax returns. Individuals also do not need to send the information relied upon to the IRS when filing their returns, but should keep it with their tax records.

Next Steps and Preparation for 2017

Employers and coverage providers should plan to furnish Forms 1095-C and 1095-B to individuals on or before March 2, 2017. The due date for health coverage providers and employers filing the 2016 Forms 1094-B, 1095-B, 1094-C or 1095-C with the IRS is not extended and remains February 28, 2017, or March 31, 2017, if filing electronically; however automatic extensions are still available by filing a Form 8809. Employers and other coverage providers that do not meet the relevant due dates for filing the 2016 Forms 1094-B, 1095-B, 1094-C or 1095-C with the IRS should still furnish and file. The IRS will take such furnishing and filing into consideration when determining whether to abate penalties for reasonable cause.

The extension of time for furnishing information statements under sections 6055 and 6056 for 2016 does not impact the information-reporting provisions for other years. According to the IRS, there are no plans for extending the reporting deadlines for 2017 or extending the good-faith relief from Code section 6721 and 6722 penalties to the 2017 reporting year. It remains to be seen what impact steps the Trump administration will take to address these and other tax and information reporting requirements under the ACA in 2017. Until further relief is granted, if any, employers are required to comply with the reporting and information return requirements currently in effect. 

Extension for Good-Faith Reporting and 2016 Forms 1095-C and 1094-C

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
Brown Smith Wallace
Foley & Lardner
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Brown Smith Wallace
Foley & Lardner
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions