IRS Proposes Rules to Extend ACA Furnishing Date

At a Glance

• On November 22, 2021, the IRS published an advance notice of proposed rulemaking, which provides an automatic 30-day extension to furnish the 1095-B and 1095-C to individuals.
• The proposed rules do not extend the due date to file with the IRS.
• Taxpayers can rely on the proposed rules for the calendar years beginning after December 31, 2020.
• The deadline (including the automatic extension) to furnish 2021 1095-C to employees is March 2, 2022.

Time to Furnish 1095-B and 1095-C

The IRS has published proposed rulemaking that will automatically extend the furnishing due date by 30 days for the 1095-B and 1095-C forms. This will allow providers and employers with more time to provide these statements to individuals. Lastly, the proposed rules state that taxpayers may rely on the proposed rulemaking for tax years beginning after December 31, 2020. This means the automatic extensions are available for 2021 reporting.

As such, employers subject to the ACA employer shared responsibility mandate must furnish a completed 2021 Form 1095-C to employees no later than March 2, 2022.

Pending the final instructions, employers who file information returns electronically to the IRS must file the 2021 Forms 1094 and 1095 by March 31, 2022. If filing paper forms, the deadline for the 2021 forms is February 28, 2022.

No More “Good-Faith Relief”

Traditionally, employers were able to rely on the “good-faith relief” to potentially avoid IRS tax penalties for non-compliance. This relief allowed employers who reported incomplete or incorrect information on their information returns to show they made a good-faith effort to file and furnish. Per the proposed rulemaking, the good-faith relief is no longer available beginning tax year 2021 and subsequent years.

Next Steps

Paylocity clients must finalize ACA form data by the end of business on January 5, 2022 to ensure all Company Administrators receive year-end forms in a timely manner. Paylocity clients may also consider the following alternative options to allow extra time to finalize forms and avoid reprint fees:

• Go Paperless to avoid reprint fees of $75.00 per package plus delivery in case updates to original forms need to be made up until February 15, 2022
  • Learn about aperless setup.
  • Prepare for a paperless year end.
• Contact a Paylocity representative for assistance to regenerate forms after making necessary changes.

Thank you for choosing Paylocity as your Payroll Tax and HCM partner. This information is provided as a courtesy, may change and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney or Advisor.