What Are Forms 1094-C and 1095-C and Should You File Them?

The Internal Revenue Service (IRS) has released final forms and instructions to be used for Internal Revenue Code § 6055 and § 6056 reporting. This material is for 2014 reporting, which is voluntary for employers. Reports for 2015 (due in early 2016) will be required, so employers should review the material and begin preparing now.

Form 1094-C is the transmittal form that accompanies Form 1095-C when filing with the IRS each year. Together, Forms 1094-C and 1095-C are used to provide information to the IRS regarding health insurance coverage offered to your full-time employees and that status of individual employee’s enrollment. If you have the equivalent of 50 full-time employees or are part of a larger group of companies, you may need to file 1094-C and 1095-C with the IRS each year. These forms are always filed together, and they help the government determine whether all employers who need to provide healthcare coverage for workers are doing so. Filing your forms on time helps you avoid steep penalties and ensures workers get the health coverage they need.

When are the filing deadlines?

A business day, according to the IRS, is any day that is not a Saturday, Sunday, or legal holiday. Health coverage is affordable if the amount charged by the employer for employee self-only coverage does not exceed nine and a half percent of the employee’s W-2 wages, pay, or the federal poverty level for 2015. Let’s review some important information and frequently asked questions https://turbo-tax.org/-C.

• A copy of the corrected form must also be furnished to the employee.
• Transmittals are cover sheets or summary documents that you must file alongside certain tax forms.
• By collecting 1095-C forms, the IRS can track who is and isn’t making coverage available to workers.

Currently, employers who submit at least 250 of these forms must file electronically here. However, a proposed change would reduce that threshold to 100 in 2022 and just 10 in 2023 and beyond. The rule would also require employers to aggregate all of the forms they are submitting.

Option 1: Payroll Companies

Your employees are asked to review the information on these forms. When filing Forms 1094-C and 1095-C with the IRS, you have until the end of February if you’re filing paper copies. If you’re filing electronically, you have until the end of March. To understand why these Forms 1094-C and 1095-C are needed, it helps to understand the Affordable Care Act (ACA)—aka The Patient Protection and Affordable Care Act. As part of the ACA, applicable large employers (ALEs) must offer health insurance coverage to their employees. IRS Form 1094 was created to be the transmittal form for Form 1095.

It’s easiest if the written statement is just a copy of the employee’s 1095-C, but it doesn’t have to be. Whatever form you do choose, it must be one of the IRS’s acceptable substitute statements. The ACA’s forms aren’t just requirements meant to make tax season stressful.

What information will be reported on Form 1094-C?

They allow the IRS to keep a closer eye on what coverage employers are offering to their employees—specifically, that they are providing the minimum essential coverage required by law. The Affordable Care Act provides information regarding what business owners must offer their employees regarding health coverage. Any employer obligated to offer health coverage is often called an ALE or an “applicable large employer”. According the ACA regulations, anyone who works 30 hours a week or more is consider a fulltime employee.

• Most notably, they use their copy to determine their eligibility for the premium tax credit, which can reduce the cost of their coverage.
• You can either file the form electronically or fill out a paper form and send it directly to the IRS.
• Reports for 2015 (due in early 2016) will be required, so employers should review the material and begin preparing now.
• If you would like an extension to file forms with the IRS, submit a Form 8809 on or before the due date of the return for an automatic extension.
• It isn’t distributed to employees and requires information such as the number of people employed and how many 1095-C forms are being filed.
• HRIS software providers are the most logical platforms to use when filing Forms 1094-C and 1095-C.

Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns, is a transmittal form that large employers must file with the IRS each year to comply with ACA requirements. Easily create digital forms, checklists, and reports for your employees to fill out and submit for your review in real-time using Connecteam. The IRS deadlines are different for paper filing and
electronic filing. For the 2022 tax year, employers able to file on
paper must do so no later than February 28, 2023.

The easiest way to file Form 1094-C is to do so electronically through the IRS portal or another third-party software that can process them. However, you can also elect to send paper copies through traditional mail. ACA employer reporting requirements grow in complexity and
can change each year. Rely on the subject matter expertise of
Equifax Workforce Solutions and our Affordable Care Act
Management solutions. With the new Affordable Care Act laws and IRS forms have come new penalties for failure to comply. These penalties and the ways in which you can incur them vary depending on whether you’re in the role of the insurance provider or the insurance recipient.

To determine your average number of full-time employees for the year, you must calculate the amount for each month, add them all together, and divide by 12. The ACA requires that applicable large employers (ALE) file Form 1094-C annually. Whether an employer is considered an ALE in a given year depends on the number of employees on their payroll.

Providers of insurance, and filers of IRS Form 1095-B or IRS Form 1095-C, may incur penalties if they fail … As the end of 2015 draws near, offices in the U.S. buzz with talk of open enrollment and ACA compliance. Whether https://turbo-tax.org/about-form-1094/ it’s what employers should be tracking for ACA or what tools you need to do it, there’s a lot to cover with the Affordable Care Act. The employer in this example would qualify as an ALE because the total is greater than 50.

The same is true of payroll companies as the information must be outsourced. In Part II, employers summarize the number of 1095-Cs you’re filing. Employers need to know that they must file one Form 1094-C per tax ID (or EIN) to the IRS. This means that even if your company oversees different divisions or employment groups, separate Forms 1094-C must be filed if these groups have individual EIN. This is the section where employers detail the coverage, cost, and the reason for offering it or not. Two IRS forms have been required of large employers since 2015 are IRS forms 1095-C and 1094-C.

Our fulfillment service will mail employee copies on your behalf and e-file data to the IRS. Upload employer, employee, and dependent data via .csv templates for automated data entry into forms. Part I. This section of the form includes the employee’s name, social security number, address, as well as the employer’s information.

Transmittals are cover sheets or summary documents that you must file alongside certain tax forms. For example, Form W-3 is the transmittal form for W-2 forms. Similarly, Form 1094-C is the transmittal form for 1095-C forms. And what happens if you’re not an ALE but still offer health coverage for workers? In this case, you may need to file Forms 1094-B and 1095-B with the IRS if you offer self-insured coverage. Need additional information related to the 1094 C form or other tax forms you may have to file to the IRS when operating an LLC?