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Northwest OH Legal Blog

Wednesday, January 11, 2017

IRS Extends Distribution (Not Filing) Deadline For ACA Reporting And Continues Good Faith Standard

The IRS has announced an extension to the distribution (but not the filing) deadline for the Affordable Care Act (ACA) reporting requirements set forth in Sections 6055 and 6056 of the Internal Revenue Code (the "Code"). This was announcement was made through Notice 2016-70.

Under Code Section 6055, health coverage providers are required to file with the IRS, and distribute to covered individuals, forms showing the months in which the individuals were covered by "minimum essential coverage." Under Code Section 6056, applicable large employers (ALEs), which general are those with 50 or more full-time employees and equivalents, are required to file with the IRS, and distribute to employees, forms containing detailed information regarding offers of, and enrollment in, health coverage. In most cases, employers and coverage providers will use Forms 1094-B and 1095-B and/or Forms 1094-C and 1095-C.

When the IRS released their final instructions for these forms, the expectation had been that the deadlines would not be extended. However, the deadline to distribute forms to employees and covered individuals has been extended from January 31, 2017 to March 2, 2017. The deadlines for filing with the IRS of February 28, 2017 (for paper) and March 31, 2017 (for electronic) are unchanged.

The regulations issued under Code Section 6055 and 6056 provide for an automatic 30-day extension to distribute and file the forms if good cause is shown. An additional 30-day extension can be obtained upon application to the IRS. Notice 2016-70 provides that these extensions do not apply to the extended due date for the distribution of the forms, but they do apply to the unchanged deadline to file the forms with the IRS.

In addition to extending the distribution deadline, the IRS has continued the interim good faith compliance standard that was in effect for the first year of ACA reporting (for the 2015 year). Under this standard, the IRS will not assess a penalty for incomplete or incorrect information on the reporting forms as long as the forms were filed on time and the filer can show that it completed the forms in good faith. Therefore, it is important to distribute and file the forms on time.

ALEs that do not file by the new deadlines will be subject to penalties under Code Sections 6721 and 6722.  Notice 2016-70 provides that the IRS will apply a reasonable cause analysis when determining the penalty amount for ALEs for filing late. According to the IRS, this analysis will take into account such things as whether reasonable efforts were made to prepare for filing, such as gathering and transmitting data to an agent or testing its own ability to transmit information to the IRS, and the extent to which the filer is taking steps to ensure that it can comply with the reporting requirements for 2017.


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With offices in Toledo and Lima, OH Allotta Farley Co., L.P.A. serves clients throughout northwest OH with various legal matters. Areas of service include Allen County, Ashland County, Auglaize County, Crawford County, Defiance County, Erie County, Fulton County, Hancock County, Hardin County, Henry County, Huron County, Lucas County, Marion County, Mercer County, Morrow County, Ottawa County, Paulding County, Putnam County, Richland County, Sandusky County, Seneca County, Van Wert County, Williams County, Wood County, Wyandot County.

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