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ACA Tax Alert – Deadline to Furnish Extended

October 12, 2020 Alerts

Please read the Tax Alert to learn more.

AT A GLANCE

  • IRS has extended the deadline to furnish Form 1095-C to employees to March 2, 2021.
  • Paylocity will distribute Form 1095-C in early January as planned. Please have your forms finalized by January 4, 2021.
  • IRS deadline for electronic filing of the forms remains March 31, 2021.

Deadline to Furnish Extended

IRS Notice 2020-76 automatically extends the deadline for furnishing the 2020 Form 1095-C to employees. Employers subject to the ACA employer shared responsibility mandate must furnish a completed 2020 Form 1095-C to employees no later than March 2, 2021; this is an extension from the original January 31, 2021. Due to this automatic extension, the IRS will not grant additional time to furnish forms to employees.

Employers who file information returns electronically to the IRS must file the 2020 Forms 1094 and 1095 by March 31, 2021. If filing paper forms, the deadline for the 2020 forms is February 28, 2021.

Final Forms and Instructions Pending

Over the summer, the IRS published the draft Form 1094-C and draft Form 1095-C for the 2020 tax year. While the forms are not the final version, currently the Form 1094-C remains unchanged. However, there are some significant updates to the 1095-C draft form from the 2019 version. More information is available in the related ACA Alert. Paylocity will provide updates once final forms and instructions are released.

Final Year for Good Faith Relief

Notice 2020-76 provides that 2020 will be the final year employers can utilize “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 report incomplete or incorrect information on their information returns to show they made a good-faith effort to file and furnish. Per Notice 2020-76, the 2020 reporting year will be the final year this relief is available.

Next Steps

Paylocity clients should finalize all year end data, including W-2 and ACA information, by January 4, 2021.


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