IRS Extends Due Dates for 2015 Forms 1094 and 1095

At the end of last year, the IRS extended the deadlines for the Affordable Care Act’s information reporting on Forms 1094 and 1095 for 2015. Specifically, Forms 1094-B and 1095-B are to be filed by providers of health coverage (mostly insurers, but also some self-insuring employers and others). Meanwhile, Forms 1094-C and 1095-C are to be filed by applicable large employers. The forms provide information to the IRS and individuals for administration of the individual mandate, employer shared responsibility and premium tax credits.

Mark your calendar

The extended deadlines are as follows:

Furnishing statements to individuals. The deadline for furnishing Forms 1095-B and 1095-C to individuals is extended by two months ― from February 1, 2016, to March 31, 2016.

Filing paper returns with the IRS. The deadline to file paper Forms 1094-B and 1094-C (and accompanying Forms 1095) with the IRS is extended by three months ― from February 29, 2016, to May 31, 2016.

Filing electronic returns with the IRS. The deadline to file electronic Forms 1094-B and 1094-C (and accompanying Forms 1095) with the IRS is extended by three months — from March 31, 2016, to June 30, 2016. (Electronic filing is mandatory for entities required to file 250 or more Forms 1095.)

Don’t ask for more

These extensions are automatic and supersede any extension requests already submitted for 2015. Any such requests won’t be formally granted. The new deadlines are more generous than otherwise available extensions, so they cannot be further extended. Those unable to meet the extended due dates are still encouraged to furnish and file as soon as possible.

The IRS says it will take such furnishing and filing into consideration when determining whether to abate penalties for reasonable cause. Other considerations will include whether:

  • Reasonable efforts were made to prepare for 2015 reporting (such as gathering data and transmitting it to a filing agent, or testing the ability to transmit information to the IRS), and
  • Steps have been taken to comply with the 2016 reporting requirements.

Notwithstanding the extensions, the IRS encourages employers and coverage providers to furnish statements and file returns as soon as they’re ready.

So be ready

The extended deadline for furnishing statements to individuals falls just two weeks before the April 15 filing deadline for individual tax returns. The IRS has also provided relief for individuals who will have already filed an individual return before receiving a Form 1095. You might mention to your employees that, generally, they’re not required to file an amended return so long as they keep the Form 1095 with their tax records.

Sidebar: Small business owners, here’s how to claim your credit

Just a couple of weeks before extending the deadlines for Forms 1094 and 1095 (see main article), the IRS released the 2015 version of Form 8941. This should be of particular interest to small-business owners, because Form 8941 can be used by eligible small employers to calculate the small business health care tax credit. Generally, this tax break is available to employers that:

  • Have fewer than 25 full-time equivalent employees,
  • Pay average annual wages of less than $50,000 (indexed for inflation), and
  • Contribute a uniform percentage of at least 50% of the premium costs for employee health insurance coverage.

The maximum tax credit is generally 50% of premiums paid (35% for tax-exempt eligible small employers, subject to a reduction for sequestration). Once calculated, the credit is claimed as a general business credit on Form 3800 (or, by tax-exempt small employers, as a refundable credit on Form 990-T).

The 2015 version of Form 8941 is virtually unchanged from 2014, other than references to the filing year and use of the updated maximum annual wages amount of $52,000. Although the inflation-adjusted threshold for 2015 is $51,600, the rounding rule required for calculating average wages results in $52,000 being the effective limit for purposes of 2015 Form 8941.

The instructions identify the information needed to calculate the credit and include worksheets to determine the number of employees and average wages. An additional worksheet helps calculate the average premium for the small group health insurance market for each state where the employer has employees.

Finally, the instructions incorporate transitional relief that permits direct enrollment for employers in certain Iowa counties without 2015 Small Business Health Options Program coverage. What’s more, the list of average premiums, by county, for all 50 states plus the District of Columbia has been updated for 2015. These averages are relevant because an employer’s health care tax credit may be reduced if the employer pays premiums greater than the average for the small group market for the state in which its employees work.

© 2016