The IRS recently addressed 2020 Form 1094 and 1095 reporting requirements, which apply to self-insured employers and applicable large employers (ALEs) in IRS Notice 2020-76, and include the following important developments:
- The furnishing deadline for 2020 Forms 1095-B and 1095-C is extended to March 2, 2021 (from January 31, 2021).
- The filing deadlines for 2020 Forms 1094-B/1095-B and 1094-C/1095-C remain unchanged – February 28, 2021 for paper filings and March 31, 2021 for electronic filings.
- New relief which first applied for 2019 reporting also continues for 2020 reporting where penalties for failure to furnish Forms 1095-B will not apply if the reporting entity (1) posts a notice prominently on its website stating that responsible individuals may receive a copy of their 2020 Form 1095-B upon request, accompanied by an email address, physical address, and contact phone number, and (2) furnishes a 2020 Form 1095-B within 30 days of the date requested. The same relief also applies to self-insured ALEs with respect to Forms 1095-C provided to non-full-time employees only.
- The IRS clarified that the 2020 reporting year will be the last year it offers good faith reporting relief to reporting entities that report incorrect or incomplete information. As in past reporting years, the IRS will take into account whether the employer made reasonable efforts to prepare for reporting the required information to the IRS and furnishing it to employees and covered individuals when determining whether an employer qualifies for such relief.
It is important that self-insured employers and ALEs continue to comply with these reporting requirements, as the filing failure penalties under Code Sections 6721 and 6722 can be steep. For 2020 forms required to be filed or furnished in 2021, these penalties are generally $280 per form. The IRS has been actively enforcing these penalties through IRS Letter 5699 (for ALEs who fail to file forms) and IRS Notice 972CG (for ALEs who fail to file by required deadlines or fail to file electronically when they have at least 250 forms). Last month, the IRS began sending both of these notifications out for the 2018 tax year.