GRAND RAPIDS, Mich., Jan. 13, 2016 /PRNewswire/ -- With the new year comes the time for business to start thinking about annual employee reporting requirements. This year even more than ever, businesses need to make sure they understand the requirements, penalties and deadlines associated with the new IRS 1095 forms.
Many businesses must file 1095 forms for the 2015 tax year under new regulations as part of the Affordable Care Act (ACA). Failure to comply with these new requirements could be very costly, given that the IRS announced an increase in penalties in 2015. In late December, the U.S. Department of Treasury and the IRS issued deadline extensions for 2015 ACA reporting. The changes primarily relate to the filing of IRS Form 1095-B, Health Coverage, and IRS Form 1095-C, Employer-Provided Health Insurance Offer and Coverage.
Though the filing extensions mean more time for businesses to gather and report data, Greatland Corporation advises employers to take note of the changes, but continue with preparations as if the deadlines had not been pushed back. Failure to file correct information returns and provide correct payee statements for information returns can still bring maximum penalties on small businesses of up to $1 million.
"We are hearing from a lot of businesses that think the IRS will not enforce fines for the 2015 reporting year," said Janice Kreuger, ACA subject matter expert for Greatland. "This is simply not the case. The IRS will not fine employers and insurers for mistakes, however, they still need to file and file on time, even with the extended deadlines. To avoid any and all fines, Greatland would recommend that businesses file when ready and don't wait until the last minute because of the extended deadlines."
For returns filed beginning January 1, 2016, Internal Revenue Code (IRC) section 6721 imposes the following fines:
$50 per information return if you correctly file within 30 days of the due date
$100 per information return if you correctly file more than 30 days after the due date but by August 1
$250 per information return if you file after August 1 or you do not file required information returns
Maximum penalties to payers for failure to file correct information returns, including furnishing an incorrect name/TIN to IRS = $3 million/year ($1 million for small businesses); $500/return for intentional disregard with no maximum penalty.
Greatland offers an abundance of resources to protect your business from penalties and help you understand how to remain in compliance for tax year 2015.