The IRS has recently changed how and when businesses must report 2022 ACA forms to their employees in the tax year 2022 and beyond.
IRS Extension for Delivery of Employee Forms
According to recent guidance from the IRS, applicable large employers (or ALEs) must file their 2022 ACA 1095 forms by the following deadlines:
- 1095 forms must be delivered to employees by March 2, 2022 (automatic extension given – the original deadline was January 31, 2022)
- Paper filing with IRS must be done by February 28
- Electronic Filing with IRS must be completed by March 31, 2022.
If your business needs an extension, you must submit Form 8809 (Application for Extension of Time to File Information Returns) by the filing due date. This must be done by any employer with federal contractors, self-insured employers, and any employer with more than 50 employees.
The automatic extension mentioned above for businesses to deliver 1095s to employees is an automatic one. It is in effect for all employers and looks to be carried forward year over year, starting in tax season 2022.
It’s important to note that many employers are still choosing to send the 1095 forms out with W-2s to employees to avoid missing the separate deadline and fielding questions and concerns from employees who are waiting for their forms.
Business Requirements for ACA Form 1095
The IRS shared guidance on the compliance and reporting of Affordable Care Act information. ALEs must offer affordable minimum essential coverage that provides minimum value to full-time employees. If not, they’ll incur an employer shared responsibility payment to the IRS.
There are helpful examples and payment situations laid out at this link for your further reference.
Penalty Relief Has Ended
Between 2015 and 2020, the IRS offered penalty relief for employers that reported incorrect or insufficient information when filing ACA forms.
But beginning with the plan year 2021 health insurance coverage (which is reported during the 2022 tax season), employers are no longer eligible for the penalty relief program.
This underscores the importance of using a trusted tax service, like eFile360, to ensure your forms are filled out and submitted correctly.
Update to 2022 ACA Affordability Cap
This change will not affect your filing and reporting in the tax year 2022. The Affordable Care Act affordability cap will change for the 2022 calendar year. The cap is a percentage set by the IRS and sets the employers’ health insurance contribution costs for their employees. In 2021 the cap was at 9.83%, and for 2022 it has been decreased to 9.61%.
File & Store 2022 ACA Forms with eFile360 for Year-Over-Year Efficiency
The rules for electronic filing of ACA forms have also recently changed. Previously, any business filing more than 250 ACA forms had to do so electronically. However, there are new updates to account for. In 2022 that number dropped to 100 and will drop again from 100 to 10 during the 2023 tax season.
Since you have to do them online anyway, why not take advantage of eFile360’s filing and data storage capabilities and services to ensure that you’re ready to fulfill your responsibilities before the deadline looms large?
Sign up for a free eFile360 account for more information about how ACA reporting and filing work.