Beware of Traps for the Unwary in Preparing ACA Information Returns (Part 2)

This is part two of a series of posts highlighting traps for the unwary in preparing information returns required under the Affordable Care Act (ACA). As mentioned in part one, information statements must be furnished to employees by no later than January 31 (February 1 for 2016 because January 31, 2016, is a Sunday), and information returns must be filed with the IRS by no later than February 28—or March 31 if filed electronically (February 29, 2016, because February 28, 2016 is a Sunday or March 31, 2016 for electronic filers).

Here are some additional tricky rules to be aware of:

  1. For purposes of reporting information under the ACA, an aggregated group of related entities is treated as one employer to determine whether the group (and each member) is an applicable large employer subject to the reporting requirements. But each member of the group has a separate obligation to report an offer of coverage (or lack thereof) to each member’s full-time employees.
  2. An employer with fewer than 100 full-time employees (including full-time equivalents), but at least 50 of them, may be eligible for temporary relief from the employer-shared-responsibility payment. Payment relief notwithstanding, eligible employers are still subject to the obligation to file and furnish the Form 1094-C transmittal and Form 1095 C information statement in 2016 for the 2015 taxable year.
  3. An information return filed with the IRS generally consists of (1) at least one Form 1094 C transmittal (more than one transmittal may be filed, so long as there is one—and only one—“authoritative transmittal”); and (2) one (and only one) Form 1095 C for each full-time employee, whether or not enrolled in coverage.
  4. If more than one Form 1094-C transmittal is filed, the one designated as the authoritative transmittal must report aggregate employer-level data. Data is not aggregated, however, for a group of related entities.
  5. For purposes of Forms 1094-C and 1095-C, an employee in a “limited non-assessment period” (e.g., a waiting period) is not considered a full-time employee during that period. (But please count an employee in a limited non-assessment period when reporting total employees on Form 1094-C, part III, column (c).)
  6. Form 1095-C may be used only if a Social Security number for the employee is entered in line 2.

Opinions and conclusions in this post are solely those of the author unless otherwise indicated. The information contained in this blog is general in nature and is not offered and cannot be considered as legal advice for any particular situation. The author has provided the links referenced above for information purposes only and by doing so, does not adopt or incorporate the contents. Any federal tax advice provided in this communication is not intended or written by the author to be used, and cannot be used by the recipient, for the purpose of avoiding penalties which may be imposed on the recipient by the IRS. Please contact the author if you would like to receive written advice in a format which complies with IRS rules and may be relied upon to avoid penalties.