News & Articles

IRS Extends Deadline to Provide 2016 ACA Forms to Recipients

Posted on Fri, Dec 02, 2016

The IRS announced that it is extending one of the deadlines for providing 2016 Affordable Care Act (ACA) information statements to recipients.

Specifically, the due date for furnishing to individuals the 2016 Form 1095-B (Health Coverage) and the 2016 Form 1095-C, (Employer-Provided Health Insurance Offer and Coverage) is extended from January 31, 2017, to March 2, 2017.

Q&As about the Process and Extended Due Date

What about filing these statements with the IRS? Is there an extension? No. The deadline for filing the forms with the IRS is not being extended. The IRS has determined that there's no similar need for additional time for employers, insurers, and other providers of minimum essential coverage to file 2016 Forms 1094-B, 1095-B, 1094-C and 1095-C with the IRS. The filing deadline for these returns remains February 28, 2017, if not filing electronically, or March 31, 2017, if filing electronically.

However, the extension in IRS Notice 2016-70 doesn't affect the provisions regarding automatic and additional extensions of time for filing information returns, which remain available under the normal rules by submitting Form 8809, Application for Extension of Time to File Information Returns.

Who must furnish these statements? Health insurance issuers, sponsors of self-insured health plans, government agencies that administer government-sponsored health insurance programs, and other providers of "minimum essential coverage" must generally file annual returns reporting information for each individual for whom such coverage is provided. An entity filing an information return reporting minimum essential coverage to the IRS must also furnish a written statement to each individual listed on the return that shows the information that must be reported to IRS for that individual.

The ACA also requires applicable large employers (generally, employers with at least 50 full-time employees, including full-time equivalent employees in the previous year) to provide the individuals with Form 1095-C.

Why are these statements provided to employees? The purpose of this reporting is to allow taxpayers to establish, and for the IRS to verify, that the taxpayers were covered by minimum essential coverage and their months of enrollment during a calendar year.

Why is the deadline being extended? The IRS decided to extend the deadline following consultation with stakeholders and the Department of the Treasury, as a substantial number of employers, insurers and other providers of minimum essential coverage need additional time. The extension is automatic.

Do businesses and others need to do anything to take advantage of the extension? No. The extension is automatic. No documentation needs to be submitted to receive the extension from the IRS.

Penalty Relief

The IRS is also providing the same penalty relief that it provided with respect to 2015 returns. IRS Notice 2016-70 extends the good-faith penalty relief from penalties for failure to timely furnish and file the information returns from the 2015 tax year to the 2016 tax year. 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 furnishing it to employees and covered individuals.

Examples of good faith include gathering and transmitting the necessary data to an agent to prepare the data for submission to the IRS, or testing the ability to transmit information to the IRS. In addition, the IRS will take into account the extent to which an employer or other coverage provider is taking steps to ensure that it will be able to comply with the reporting requirements for 2017.

The IRS is encouraging employers and other coverage providers that don't meet the relevant due dates to still furnish and file. The IRS will take such furnishing and filing into consideration when determining whether to abate penalties for reasonable cause.

The Future

IRS Notice 2016-70 states the tax agency doesn't anticipate extending this transition relief — either with respect to the due dates or with respect to good faith penalty relief — to reporting for 2017. However, as indicated in presidential election campaign promises, there could be major changes to the ACA under the Trump administration.

If you have questions about your ACA responsibilities under the Affordable Care Act, contact your EHTC tax, payroll or employee benefits advisor.

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Tags: Affordable Care Act (ACA), IRS, IRS Filing, Affordable Care Act

Get Ready Businesses: Some Filing Due Dates are Changing

Posted on Mon, Nov 14, 2016

Thanks to recent legislation, the due dates have been changed for some information returns and related statements and for some business tax returns. Here's what you need to know.

Two Laws Are Responsible for the Changes

1. The Protecting Americans from Tax Hikes (PATH) Act. Enacted on December 18, 2015, the PATH Act extended or made permanent a number of "tax extenders" (provisions with expiration dates that had been routinely extended by Congress on a one- or two-year basis). It also contained a number of other provisions, including the changed due dates for W-2s and some 1099s.

2. The Surface Transportation and Veterans Health Care Choice Improvement Act of 2015. This new law was primarily designed as a three-month stopgap extension of the Highway Trust Fund and related measures. But it includes a number of important tax provisions, including the revised due dates for partnership and corporation tax returns. President Obama signed it into law on July 31, 2015.

Earlier Due Dates for Forms 1099-MISC and W-2

When a business pays non-employee compensation aggregating to $600 or more to a single payee in a tax year, the business must file a Form 1099-MISC to report the payments to the IRS. Similarly, employers must report wages paid to employees on Forms W-2. Copies of these forms (called payee statements) must also be supplied to payment recipients. 

Before a law passed last year, Forms 1099-MISC and W-2 were required to be filed with the IRS and the Social Security Administration (SSA) by the last day of February or by March 31 if filed electronically. (See "Two Laws Are Responsible for the Changes" at right.) Now, the due dates have been accelerated.

Starting with returns for the 2016 calendar year (which must be filed in early 2017), the due date for IRS and SSA filings is advanced to January 31 of the following year. The March 31 due date for electronic filings is no longer available. So the deadline for filing 2016 Forms 1099-MISC and W-2 with the IRS and the SSA is January 31, 2017.

Note: For filing 2016 Forms 1099-MISC and W-2 with the IRS and the SSA, one 30-day extension is allowed. To obtain an extension, you must file Form 8809, "Application for Extension of Time to File Information Returns," by no later than January 31.

The deadline to supply payee statements to recipients remains January 31 with no extensions allowed.

Reason for the New W-2 and 1099 Deadline

The goal of the new earlier deadline is to:

  • Give the IRS more time to spot errors on tax returns.
  • Make it easier for the tax agency to verify the legitimacy of returns and properly issue refunds to taxpayers eligible to receive them.

Reducing tax refund fraud has been a priority of the federal government in recent years.

Later Due Dates for 2016 Corporate Federal Income Tax Returns

For many years, C corporation federal income tax returns on Form 1120 were due two and a half months after the end of the corporation's taxable year (March 15, adjusted for weekends and holidays, for a calendar-year corporation). Form 1120 could be automatically extended for six months (through September 15, adjusted for weekends and holidays, for a calendar-year corporation).

However, a law passed last year established new due dates for Form 1120. For tax years beginning after December 31, 2015, the due date is generally moved back one month to three and a half months after the close of the corporation's tax year (to April 15, adjusted for weekends and holidays, for a calendar-year corporation).

Automatic five-month extensions are allowed (to September 15, adjusted for weekends and holidays, for a calendar-year corporation). You must file Form 7004, "Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns," to obtain an automatic extension.

The Form 1120S due date for S corporations is unchanged.

Note: Under a special transition rule for C corporations with fiscal years ending on June 30, the due date change won't kick in until tax years beginning after 2025. Until then, the traditional due date of September 15 (adjusted for weekends and holidays) for these corporations will continue to apply, with automatic seven-month extensions allowed.

Earlier Due Dates for 2016 Partnership and LLC Returns

For many years, partnership federal income tax returns on Form 1065 have been due three and a half months after the end of the partnership tax year. So for a calendar-year partnership, the filing deadline was April 15 of the following year (adjusted for weekends and holidays).

The Form 1065 due dates have also now been changed. For partnership tax years beginning after December 31, 2015, the Form 1065 due date is accelerated by one month, to two and a half months after the close of the partnership's tax year (March 15 for calendar-year partnerships). The same deadline applies to limited liability companies (LLCs) that are treated as partnerships for federal tax purposes.

Automatic six-month extensions are allowed (to September 15, adjusted for weekends and holidays, for a calendar-year partnership or LLC). File Form 7004 to obtain an automatic extension.

Need Help with Compliance?

If you have questions about the new filing deadlines for tax returns or information returns, or you want to file an extension, contact your EHTC Tax Advisor.

 

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Tags: Tax, Business, IRS, IRS Filing, Small Business

Can a Modest-Income Elderly Person Stop Filing Tax Returns?

Posted on Sun, Oct 05, 2014

As the Old Saying Goes: Better Safe than Sorry.

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Tags: EHTC Article, IRS Audit, IRS, Newsletter, Articles, Tax Return, Filing, IRS Filing, Taxes