IRS Releases Final 2020 Forms 1094 & 1095 And Related Instructions For ACA Reporting

CATEGORY: Client Update for Public Agencies, Private Education Matters, Public Education Matters
CLIENT TYPE: Private Education, Public Education, Public Employers
DATE: Jan 27, 2021

We noted in the October 2020 Benefits Corner that the IRS released drafts of Form 1094-C and Form 1095-C for Applicable Large Employers (ALEs) to use in reporting ACA compliance for the 2020 tax year.  The IRS recently issued the final versions of Form 1094-C and Form 1095-C and related instructions. The forms and instructions remain mostly unchanged compared to the previous year except for some of the notable highlights below.

The 2020 Form 1095-C makes the completion of the “Plan Start Month box” mandatory for the first time.  The Form 1095-C instructions also explain that the affordability threshold for plan years beginning in 2020 is 9.78%. The forms also explain the indexed penalty for reporting failures increased from $270 to $280 per return, with calendar-year maximum penalties increasing from $3,339,000 to $3,392,000.  The IRS also provided the following deadlines and updates regarding extensions:

The due date for furnishing Form 1095-C to individuals was extended from January 31, 2021, to March 2, 2021. The IRS stated it will not grant any further additional extensions for providing individuals Form 1095-C.

For the calendar year 2020, ALEs must file Forms 1094-C and 1095-C by March 1, 2021, or March 31, 2021, if filing electronically.

ALEs should carefully read the forms and instructions when conducting required ACA reporting compliance.  LCW remains available to assist employers through this process.

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