Article

Due Date for Reporting Health Care Coverage to Individuals Extended

November 18, 2020

Employers with 50 or more full-time employees, including full-time equivalent employees, in the previous year, members of an aggregated group of these employers and those providing minimum essential coverage are required to file and furnish one of the Form 1095 series to report health care coverage.

These forms need to be filed with the IRS on or before February 28 (March 31, if filed electronically) and furnished to the individual on or before January 31 following the calendar year to which the return relates. In 2021, the January 31 furnishing due date falls on a weekend day; accordingly, in 2021 furnishing of such forms to individuals will be timely if done on or before February 1. The IRS has the ability to extend these due dates for up to 30 days for good cause and filers can receive an automatic extension of time to file these forms for 30 days by submitting Form 8809, Application for Extension of Time to File Information Returns, on or before the due date.

IRS Notice 2020-76 extends the due date for furnishing Form 1095-B to individuals to March 2, 2021.  Because this is a 60-day extension, there will not be an automatic extension of 30 days from the extended due date.  Note that this extension does not apply to Form 1095-C or the filing of Form 1095-B with the IRS.  These filings which have not been extended by this relief may be automatically extended by filing Form 8809 on or before the due date. Passage of the Tax Cuts and Jobs Act (“TCJA”) makes filing of the Form 1095-B less important as the tax rate applied for the individual shared responsibility payment became zero for months beginning after December 31, 2018.

In 2019, Treasury and IRS asked for comments regarding whether these extended due dates were necessary and got only one comment.  This request for comments is being renewed and, without more comments explaining why the relief is necessary, no extension of the due date will be granted for future years.

The IRS is continuing to study how the information reporting rules can be changed as a result of the TCJA changes reducing the tax rate to zero for the individual shared responsibility payment. As such, no penalties will be assessed for failing to furnish a form 1095-B to individuals if the reporting entity 1) posts a notice prominently on its website stating that individuals may receive a copy of their 2020 Form 1095-B upon request, accompanied by an email address and a physical address to which a request may be sent, as well as a telephone number that responsible individuals can use to contact the reporting entity with any questions and 2) furnishes a 2020 Form 1095-B to any individual upon request within 30 days of the date the request is received.

According to the IRS, this is a final extension of relief from information reporting penalties. This relief is available for incorrect or incomplete information where it can be shown that the entity made good-faith efforts to comply with the information reporting requirements. It applies to missing and inaccurate taxpayer identification numbers and dates of birth, as well as other information required on the return. Because this good-faith relief was intended to be transitional relief, the IRS is announcing that 2020 is the last year the Treasury Department and the IRS intend to provide this relief.

Reporting entities must make a good-faith effort to comply to be eligible for this relief from information reporting penalties. In determining good faith, the IRS will take into account whether an employer or other coverage provider made reasonable efforts to prepare for reporting the required information to the IRS and furnishing it to employees and covered individuals, such as gathering and transmitting the necessary data to an agent to prepare the data for submission to the IRS or testing its ability to transmit information to the IRS. Reporting entities that fail to file or furnish an information return by the extended due dates, except as otherwise provided in this notice, are not eligible for relief.

Cherry Bekaert is available to discuss this and other information reporting rules with you.