IRS Extends ACA Information-Reporting Deadline, Penalty Relief

Author: Gloria Ju

November 21, 2016

On November 18, the IRS published Notice 2016-70, which provides employers with a little more time to furnish individual information returns to employees under the Affordable Care Act (ACA) and extends penalty relief to employers that comply with the ACA information-reporting requirements in good faith.

For 2016 ACA information that is reported in 2017, the IRS has extended the deadline for employers to provide Form 1095-B or Form 1095-C to employees and other covered individuals to March 2, 2017. Last year, the original January 31 deadline was extended to March 31 for 2015 information reported in 2016. Employers may not ask for an extension of the extended due date.

Notice 2016-70 does not extend the deadlines for employers to report ACA information to the IRS on Forms 1094-B and 1095-B or Forms 1095-B and 1095-C. Although the IRS had extended the deadlines for reporting in 2016, the original deadlines apply for reporting in 2017: February 28 (paper) and March 31 (electronic). An employer may request an extension on these due dates.

The ACA subjects an employer to penalties for failing to provide the information reports on time and for providing incomplete or incorrect reports. Notice 2016-70 continues to relieve an employer from penalties for providing incomplete or incorrect reports only, if the employer can show it made a good-faith effort to comply with the information-reporting requirements. This relief does not apply to an employer that fails to comply, fails to timely comply or fails to comply in good faith.

In determining good faith, the IRS will consider whether an employer has made reasonable efforts to prepare for furnishing or reporting the required information, such as gathering and transmitting the necessary data to an agent to prepare the data for submission to the IRS or testing its ability to transmit information to the IRS. The IRS will also take into account the extent to which the employer is taking steps to ensure that it will be able to comply with the reporting requirements for 2017.