Accountants are known to take on long nights and sweat more than a few deadlines during the first quarter of each year. In 2018, they will need to plan for an even busier January.
As CPA’s already know well(!), employers must provide their employees with a W-2, and each independent contractor with a 1099-MISC (if they were paid $600 or more during the year). However, this year, not only are employers required to provide employees with their W-2 and 1099-MISC forms by January 31, 2018, but ACA forms, including 1095-C and 1095-B, are also due on the same date.
Due to the Protecting Americans from Tax Hikes (PATH) Act enacted last December, the IRS’ effort to fight fraud and identity theft, employers also now have new deadlines for W-2 and 1099-MISC reporting. But what’s the reason for the earlier filing deadline? The IRS says, “Having these W-2s and 1099s earlier will make it easier…to verify the legitimacy of tax returns and properly issue refunds to taxpayers eligible to receive them.”
Check out the list of ACA forms and filing deadlines below to avoid penalties for late filing.
- Form 1095-B (Health Coverage):
This form includes the number of months you and any covered dependents were covered by insurance. Individuals who purchased private insurance, the provider will send this information to the IRS.
- Form 1095-C (Employer-Provided Health Insurance Offer and Coverage):
This statement is issued by employers with 50 or more full time employees (including FTEs) to employees and the IRS to prove they provided healthcare per ACA requirements.
|W-2 & 1099-MISC Forms Due Date||Requirements|
|January 31, 2018||W-2 and 1099-MISC copies to recipients and/or employees|
|January 31, 2018||Paper format: W-2 and 1099-MISC federal (SSA / IRS) filing|
|January 31, 2018||E-File format: W-2 and 1099-MISC federal (SSA / IRS) filing|
|ACA Forms Due Date||Requirements|
|January 31, 2018||Form 1095 copies to recipients and/or employees|
|February 28, 2018||Paper copies of form 1095 to IRS|
|April 2, 2018||E-file form 1095 to IRS|
Since ACA forms require information from HR, payroll and benefits systems, businesses need to play close attention this year in order to properly track and record the data or else it could mean big financial fines. Paired with the early deadlines, accountants handling reporting on behalf of their clients need to start now rather than wait until January when deadlines will begin to stack up.
It’s important to note that some employers have the option to file their ACA reporting by paper or electronically. However, any filing of more than 250 forms MUST file ACA information returns electronically. Businesses planning to file less than 250 forms may file by paper, though the IRS encourages electronic filing.
In case accountants need any more motivation to prepare for a busy January, the IRS has increased penalties for tax reporting for the following issues:
- Failing to file the correct forms by the due date
- Intentional disregard of filing requirements
- Failure to furnish W-2’s to employees
While the IRS has extended the ACA reporting deadlines for all employers in previous years, this generosity should not be expected in 2018. In fact, failure to file complete and accurate Forms 1094-C by the form deadline will result in penalties equal to $250 per form, not to exceed $3 million per year. Even more, failure to file and furnish correct information on Form 1095-C could result in a $500 per-form penalty for employers.
Even still, sometimes the best laid plans don’t work out. Accountants should expect more business this year as it is likely that many will need help meeting the new deadlines. The end of January will come quickly, so it’s important to be prepared for the deadlines now vs. later.