The Internal Revenue Service (IRS) has released Notice 2016-70, which extends the deadline for furnishing Forms 1095-B and 1095-C to individuals from January 31, 2017 to March 2, 2017. The Notice did not delay the due date for filing the forms with the IRS, which remains February 28 if filing by paper, or March 31 if filing electronically.
The instructions to Forms 1094-C and 1095-C provide that employers can request a 30-day extension to furnish statements to individuals by sending a letter to the IRS that includes the reason for delay. However, because the Notice’s extension of time to furnish the forms is more generous than the 30-day extension contained in the instructions, the IRS will not formally respond to requests for an extension of time to furnish 2016 Forms 1095-B or 1095-C to individuals.
Employers may still obtain an automatic 30-day extension for filing with the IRS by filing Form 8809 on or before the forms’ due date. An additional 30-day extension is available under certain hardship conditions.
The Notice encourages employers who cannot meet the extended due dates to furnish and file as soon as possible. The IRS will consider whether employers have made reasonable attempts to comply with the requirements and the steps that have been taken to prepare for next year’s (2017) reporting when determining whether to abate penalties for reasonable cause.
Like last year, taxpayers can file their personal income tax return without having to attach the relevant Form 1095 to their tax returns. Taxpayers should keep these forms in their personal records.
The Notice also extends last year’s good-faith transition relief from penalties for incorrect or incomplete information on the forms. These penalties can be waived for employers who can show that they made good-faith efforts to comply. The good-faith relief applies only to furnishing and filing incorrect or incomplete returns, and not timeliness failures. However, if an employer is late filing a return, it may be possible to get penalty abatement for failures that are due to reasonable cause and not willful neglect.
Employers should note that the IRS does not anticipate extending transition relief – either with respect to the due dates or with respect to good faith relief from penalties – to reporting for 2017.
|About The Authors. This alert was prepared for C.M. Smith by Stacy Barrow and Mitch Geiger. Mr. Barrow and Mr. Geiger are nationally recognized experts on the Affordable Care Act. Their firm, Marathas Barrow & Weatherhead LLP, is a premier employee benefits, executive compensation and employment law firm. They can be reached at firstname.lastname@example.org or email@example.com.|