When does an employer have to provide a 1095-C? This is a common question among businesses, especially those with employees. The 1095-C form is a crucial document under the Affordable Care Act (ACA), which requires employers to report information about their health insurance offerings to both the IRS and their employees. Understanding the deadlines and requirements for providing this form is essential for compliance and to avoid potential penalties.
The Internal Revenue Service (IRS) mandates that employers with at least 50 full-time equivalent employees (FTEs) must provide a 1095-C form to each full-time employee and file it with the IRS. The purpose of this form is to help employees determine their eligibility for premium tax credits and to verify compliance with the employer mandate.
Here’s a breakdown of the key deadlines for providing the 1095-C form:
1. Distributing to Employees: Employers must provide the 1095-C form to their full-time employees by March 2, 2023, for the 2022 tax year. This deadline is the same for both paper and electronic distributions.
2. Filing with the IRS: Employers must file the 1095-C forms with the IRS by March 31, 2023, for paper forms and by March 31, 2023, if filing electronically. For employers who choose to file electronically, the deadline is extended to April 30, 2023.
It’s important to note that employers must also file an information return transmittal form (1094-C) with the IRS when submitting the 1095-C forms. This form summarizes the information reported on the 1095-C forms and provides the employer’s information.
There are certain exceptions to the requirement of providing a 1095-C form. For example, employers who offer minimum essential coverage (MEC) to their employees may be exempt from the requirement to provide the form. Additionally, employers who offer coverage to all employees, regardless of full-time status, may also be exempt.
Failure to comply with the 1095-C requirements can result in penalties. The penalty for failing to provide a 1095-C form to an employee is $260 per form, with a maximum penalty of $3,262,500 per year. The penalty for failing to file the form with the IRS is $526 per form, with a maximum penalty of $3,262,500 per year.
In conclusion, understanding when an employer has to provide a 1095-C form is crucial for compliance with the Affordable Care Act. By adhering to the deadlines and requirements, employers can avoid potential penalties and ensure their employees receive the necessary information for tax purposes.
