Banking & Finance, Government, and Health Care

IRS extends filing date for employers’ ACA forms

January 8, 2016
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The holiday season is a notoriously hectic time of year. So when the IRS extended its deadline to submit some Affordable Care Act forms in the last week of December, it seemed the government agency had gifted employers the one thing no one has enough of — time.

But that generous offering comes at a cost, and it is one that likely will leave some employees feeling impatient.

On Dec. 28, the IRS extended the deadline for employers to provide employees with 2015 ACA reporting forms from the original February dates. Employers now have until March 31 to provide employees with their copies of Form 1095-C and Form 1095-B, nearly two months past Feb. 1, the original deadline. They also have until May 31 to file forms 1095-C and 1094-B with the IRS, a three-month extension from Feb. 29.

And while that’s good news for employers and payroll service providers who may need the extra time to meet the requirements, it leaves employees who need those forms to file their taxes in somewhat of a bind.

While the IRS has tried to mitigate some of the issue, allowing for employees to submit their taxes using other information detailing their offers of coverage, it’s unlikely that detail will be included on already-printed tax forms — and individuals filing their own taxes might not be aware of that option.

“It’s probably a cause of anxiety if people know they’re supposed to be getting something from their employer and they don’t,” said Varnum Law partner Jeffrey DeVree, who specializes in employee benefits and tax law. “And I think the IRS provided a solution, but it depends on if people are aware of that solution — and when it comes to filing taxes, people are already anxious anyway.”

The biggest issue could be in delaying employees from collecting their tax refunds. Since enrollees in the Affordable Care Act program receive their premium tax credit subsidy as they go, they won’t be delayed in receiving that money.

DeVree said it’s not unusual for the IRS to extend deadlines when it comes to filing new tax forms, and this is the first year for the ACA forms.

This likely will be the only year the IRS offers this extension, and by doing so, employers will not be granted further extensions.

DeVree also said the extension not only provides some relief for businesses strapped to get their tax information out but also for the IRS in working through its tax submissions.

“I think this is going to create a logjam for the IRS anyway in terms of bandwidth and data-processing ability,” DeVree said.

“They already have to process W2 (forms) and get those all electronically, and these ACA forms include a lot more data than a W2. So that’s a lot of bandwidth; that’s a huge increase in the amount of data the IRS computer systems have to process.

“So it could be that the IRS is not just concerned about employers, but they’re also not totally ready for this huge amount of data coming their way.”

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