The IRS has just issued guidance extending the deadline to distribute 2017 Forms 1095-B/C from January 31, 2018 to March 2, 2018.
No extension has been granted for filing forms with the IRS. If filing by paper, the Forms 1094/1095 will be due February 28, 2018. If filing electronically, forms will be due April 2, 2018.
As a reminder, Forms 1095-B are provided to covered individuals by insurance companies and self-insured employers who employ less than 50 full-time equivalent employees. They provide documentation of minimum essential coverage during the applicable tax year and proof that the individual is not liable for an individual shared responsibility payment. The Form 1095-C is an information return that an Applicable Large Employer (ALE) must provide to all full-time employees which reports on the type of coverage that is offered by the ALE during the tax year.
Due to the extension, taxpayers may not receive their forms by the time they are ready to file their 2017 tax return. The IRS has confirmed that individuals may file taxes without having received their Forms and may rely on other information received from their employer or coverage provider, for example, a confirmation statement from their employer that the employer provided minimum essential coverage. When the individual does receive their Form 1095, they should retain the statement with their tax records.
The IRS has also extended the Good Faith Transition Relief that was made available to filers last year. The IRS will not impose penalties on reporting entities that can show they have made good faith efforts to comply with the information reporting requirement. However, this relief applies only to furnishing incorrect or incomplete information, and not a failure to distribute or file Forms 1094 or 1095-B/C.
When determining a good faith effort, the IRS will take into account whether the employer or other coverage provider made reasonable efforts to prepare for reporting, for example they may examine the processes used to gather and transmit information to providers involved in preparing the Forms 1094/1095 on behalf of the employer, as well as any steps taken to collect data from third parties. In addition, employers should also document all steps they are taking to ensure timely compliance with 2017 reporting deadlines.
Please note: The exemption from penalties does not apply to the 4980H (a) and (b) penalties - failure to offer coverage to employees or failure to offer affordable or minimum value coverage, this exemption applies to information reporting penalties, which for the 2017 reporting year, can run up to $270 per return to a maximum of $3,282,500.