2016 ACA Reporting Deadline Extended to March 2, 2017 and “Good Faith” Compliance Standard Retained
Late last week, the IRS released Notice 2016-70, extending the due date for employers to provide the 2016 Form 1095-B and Form 1095-C to employees from January 31, 2017, to March 2, 2017. This extension, while welcome, is an entire month shorter than the deadline that was extended for 2015 reporting; last year, employers were provided until March 31, 2016, for this purpose.
Significantly, unlike the extension afforded last year, the IRS has not extended the deadline by which employers must file the 2016 Forms 1094-B, 1095-B, 1094-C, or 1095-C, which remains February 28, 2017 (if not filing electronically) or March 31, 2017 (if filing electronically).
We have received some questions with regard to whether or not President-Elect Trump would be eliminating the reporting requirement, perhaps for the 2017 reporting. To date, there has been no official notice that that reporting due in 2017 will be eliminated; therefore, employers should continue to anticipate that the reporting will be required – and by these deadlines.
As a reminder, last year the IRS provided “transition relief” from penalties for reporting entities that could show good faith efforts to comply with the Affordable Care Act’s information reporting requirements. In a welcome move, the recent IRS notice extends that transition relief for 2016 reporting (due in early 2017). This relief will apply both for furnishing to individuals and for filing with the IRS. The good faith relief applies only for incorrect or incomplete information (including missing and inaccurate taxpayer identification numbers and dates of birth). As with last year, no relief will be provided for entities that fail to file or furnish the requirement statement or return by the due dates (as extended).
Whether good faith exists will continue to be assessed under a facts and circumstances test, which will take into account whether an employer made reasonable efforts to prepare for reporting the required information and furnishing it to employees/covered individuals, including testing transmissions and gathering and transmitting the necessary data to any agent (e.g., reporting vendor or payroll provider) to prepare the data for submission to the IRS.
While employers should feel some sense of relief with this additional time and comfort in reporting, they should still continue to prepare to comply with these impending deadlines.