Important Updates on IRS 1095-C and 1095-B Forms for 2023 Tax Year
Recently, the Internal Revenue Service (IRS) released important instructions regarding the new 1095-C and 1095-B forms issued for both applicable large employers (ALEs) subject to the employer mandate and non-applicable large employers with self-funded plans. These forms are crucial for reporting information about healthcare coverage offered to employees and their dependents.
Changes in Filing Requirements
Starting from the 2023 tax year, which has forms due in the first quarter (Q1) of 2024, the IRS will no longer accept paper applications unless a company has less than 10 total returns . The "total returns" is a big point of confusion we're seeing - employers should be doubly aware of this rule. "Total returns" includes:
W-2s
Any 1099s (for example, 1099-MISC or 1099-NEC)
1095s (1095-C or 1095-B)
1094s (transmittal forms for 1095s)
1098s (for reporting mortgage interest or student loan interest)
Or other tax forms
Preparation is Key
All types of employers, regardless of size or status as an ALE (who meet the above threshold), will now need to file the 1095-B or 1095-C forms electronically. It's crucial to start preparing now with your payroll provider or an Affordable Care Act (ACA) reporting vendor to ensure timely submission to the IRS. Employers should gather the necessary information about their health plans and covered individuals well in advance.
Filing Deadlines
For companies eligible to file on paper (very small companies with fewer than 10 total returns): February 28, 2024
For electronic filers (most employers): No later than April 1, 2024 (due to March 31, 2024, falling on a Sunday)
Employees must receive their 1095s no later than March 1, 2024, with a permanent 30-day extension from the previous January 31 deadline for providing forms to individuals.
Additional Information/Reminders
The 1095-C form is used by ALEs to report information about healthcare coverage offered to full-time employees and their dependents.
The 1095-B form is used by self-funded health plans, regardless of the employer's size, to report coverage information for individuals enrolled in the plan.
These forms are essential for individuals to verify their compliance with the individual mandate and for the IRS to enforce the employer mandate.
Conclusion
The IRS's new electronic filing requirements and deadlines for the 1095-C and 1095-B forms are significant changes that employers need to be aware of for the 2023 tax year and beyond. By understanding these updates and preparing accordingly, employers can ensure timely and accurate reporting of healthcare coverage information to both employees and the IRS.
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