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Last Year for Leniency on Forms 1095-C

In keeping with prior years, the IRS has extended the due date for providing the 2020 Forms 1095-B and C to individuals until March 2, 2021. These forms are required for compliance with the Affordable Care Act (?Ç£ACA?Ç¥). In Notice 2020-76, the IRS also extended the good-faith transition relief for penalties related to incomplete or incorrect Forms 1095-B and C to 2020. Notice 2020-76 also states that this is the last year for which the IRS intends to provide this type of good-faith relief. This relief was especially helpful for employers who received ACA employer penalty notices and determined that the penalty notices were related to reporting errors on their Form 1095-C. Employers should thus ensure that all software errors and glitches that resulted in incorrect coding on Forms 1095-C are resolved before the 2021 reporting is due. Notice 2020-76 is available here.

Extension of Due Date to Furnish IRS Form 1095 to Individuals and of Good Faith Transition Relief

In Notice 2019-63, the IRS extended the due date, from January 31, 2020 to March 2, 2020, for furnishing to individuals the 2019 Form 1095-B and Form 1095-C. This notice does not, however, extend the due date to file Forms 1094-B, 1095-B, 1094-C, and 1095-C with the IRS, which are due by February 28, 2020 (paper filing) or March 31, 2020 (filing electronically), although certain other extensions may be available. This notice also extends the IRS?ÇÖs good faith transition relief from penalties that could apply for incorrect or incomplete information reported on such forms furnished to individuals or filed with the IRS. This relief does not apply if the forms were not filed or furnished by the applicable due date. Notice 2019-63 is available here.

2018 HSA Contribution Limit Transition Relief

The IRS has issued guidance stating that taxpayers may use $6,900 as the maximum health savings account (?Ç£HSA?Ç¥) contribution limit for family coverage for 2018. In 2017, the IRS stated that the maximum HSA contribution for family coverage for 2018 would be $6,900. However, recent tax reform legislation changed how the contribution limit is calculated, and in March of 2018, the IRS issued a reduced limit for 2018 of $6,850. The new IRS guidance now permits taxpayers to continue to treat the 2018 limit as $6,900 and also provides guidance for taxpayers who already received a distribution of an excess contribution in 2018 based on the $6,850 limit. View the guidance in Rev. Proc. 2018-27.

IRS Provides Transition Relief Regarding QSEHRA Notice Deadline

The IRS has provided transition relief under its Notice 2017-20 (the ?Ç£IRS Notice?Ç¥) regarding the employee notice requirement that small employers must meet if they want to provide a ?Ç£qualified small employer health reimbursement arrangement?Ç¥ (?Ç£QSEHRA?Ç¥) to their employees. As background, the 21st Century Cures Act (the ?Ç£Cures Act?Ç¥) permits certain employers who are not ?Ç£applicable large employers?Ç¥ under the Affordable Care Act (i.e., generally, employers with fewer than 50 full-time or full-time equivalent employees) (?Ç£Eligible Employers?Ç¥) to offer QSEHRAs for the reimbursement of substantiated medical care expenses incurred by employees or their family members, effective January 1, 2017. The Cures Act requires Eligible Employers to furnish a written notice to their eligible employees (?Ç£QSEHRA Notice?Ç¥) at least 90 days prior to the beginning of the year in which the QSEHRA will be provided (or in the case of an employee who is not eligible to participate in the QSEHRA… Continue Reading

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