Back in October, the IRS released this Notice, extended the ACA reporting deadline for providing employees with plan year 2020 statements (Forms 1095-B and 1095-C) to March 2, 2021. The IRS will not grant an additional 30-day extension beyond this deadline for furnishing these forms. The deadlines for filing 1095 forms with the IRS were not extended by the Notice; those remain at February 28, 2021 for paper filing, and March 31, 2021 for electronic filing.
The IRS also extended its “good-faith effort” relief to employers for 2020 reporting. This means that while the IRS can impose penalties for failure to furnish an accurate Form 1095-C or 1095-B to an employee or for failure to file an accurate form with the IRS, it has not done so in past years, nor will it for 2020 reporting, if the reporting entity can show that it made good faith efforts to comply with the information-reporting requirements. The good-faith effort relief only applies to incorrect or incomplete information, and not to untimely reporting. Of particular note, the IRS announced that this will be the final extension of such good-faith reporting relief, so employers may not rely on relief in their future plan year reporting.
The ACA is an extremely complex law, and the penalties for non-compliance can be steep. We recommend that employers utilize ACA reporting software and diagnostic tools that produce complete audit reports to ease the burden of ACA compliance. If you don’t already employ ACA software solutions, now is the time to get a head start on 2021 reporting so you don’t scramble to backfill data and/or face potential penalties for untimely, inaccurate, or incomplete reporting in the future. myHRcounsel’s partner SyncStream Solutions offers customized reporting and diagnostic tools to help simplify compliance.