IRS Releases New Dates for 2020 ACA Filings

By Gargi Talegaonkar, Product Manager

1) Extension Notice:

Due date for distributing 1095B/1095C forms to employees, for tax year 2020, has been extended from January 31, 2021 to March 2, 2021. Due date to e-file forms remains unchanged and is March 31, 2021.

Automatic extension of 30 days for e-filing of 1094/1095 forms remains available with submission of form 8809 on or before March 31, 2021.

2) Relief Regarding Distribution of 1095B forms to the Employees:

IRS can impose two types of penalties on the reporting entities – 1. Under section 6721 for late e-filing or filing incorrect information on forms 1094/1095 to IRS 2. Under section 6722 for late or incorrect furnishing of forms to the employees

For 2020 tax year, IRS will not assess any penalty to the employers who fail to distribute 1095B forms for the self-funded plans to their employees by March 2, 2020, provided below two conditions are met,

1. Employer must post a notice on its website stating that responsible individuals may receive a copy of their 2020 1095B form upon request. This notice should include email address, mailing address for the request to be sent, along with contact telephone number for any questions.

2. 1095B form is shared with the employee within 30 days of the date the request is received.

Employers can share 1095B form electronically or through mail.

3) Final Extension of Good-Faith Transitional Relief from Penalties:

2020 is the last year that IRS intends to provide a good-faith relief for late/incorrect filing or furnishing forms under section 6721 and 6722.

4) Penalty Amount Imposed on 2020 Forms

Under section 6721 – Failure to e-file forms or correct information on forms.

E-filing forms/corrections** within 30 days

Failure to submit corrections within 30 days after required filing date will impose Subsection(a) penalty of $50 per form with a maximum amount of 500,000

E-filing/corrections on or before August 1

Failure to e-file forms or submit corrections after 30^th day of due date but on or before August 1 of the filing year will impose Subsection(a) penalty of $100 per form with maximum amount of 1,500,000

** Under penalty, “correct information on forms” indicates filing a replacement for rejected transmission