New IRS Filing Requirement for ACA Reporting
The IRS is changing electronic filing requirements for ACA and other required reporting in 2024.
While Amwins Connect originally reported this new requirement back in March, we thought it important enough to remind everyone again of the required changes as the deadlines are right around the corner.
For many years now, employers could file their ACA reporting forms (1094/1095) by paper if the employer was filing fewer than 250 returns. Starting in 2024 (for the 2023 calendar year reporting), employers filing 10 or more returns must file their Forms 1094/1095 electronically. This new IRS requirement also includes Forms W-2 and 1099s.
Employers/plan sponsors that are required to report the ACA and other forms to the IRS must start to prepare if they have not yet done so. The new ACA electronic reporting requirement deadline March 31, 2024.
Please visit our Amwins Connect Storefront to view our partners’ products and resources if a vendor is needed to assist a client with the IRS ‘electronic’ submission requirement. Or contact your Amwins Sales Representative in order to discuss our partners and their services.
Summary of important information regarding this new requirement
- New term in the final requirement is ‘aggregation of returns’. This is defined as the calculation of the employer’s total returns to include all Forms W2, 1099s, 1094/1095 Forms, and other returns that would all be included together and counted in the 10-return count.
- All ALEs (Applicable Large Employers) filing 10 or more statements.
- All Non-ALEs filing 10 or more statements – this would include smaller self-funded plans and level-funded plans.
- The new requirement is required when the employers/plan sponsors file in early 2024 for the calendar year 2023.
- Employers needing to file ACA reporting with the IRS will need to engage with an ACA reporting or payroll partner to comply with the electronic filing requirements.
Employers/plan sponsors should engage with an ACA Reporting vendor to file electronically
Distribution of the 1095 statements to employees is required by March 2nd of each year and electronic filing deadline with the IRS is March 31st. And keep in mind there are a handful of states with individual mandates that may require state level deadlines earlier than the federal deadlines.
ACA reporting forms are filed electronically through the IRS Affordable Care Act Information Returns (AIR) system. This requires a specific coding format for transmission that a typical employer could not perform on their own without the support of an experienced ACA reporting vendor.
Are there Exceptions?
The new regulations do permit the IRS to grant exceptions to the electronic filing requirements in cases of ‘undue hardship’. One principal factor in determining hardship will be the amount by which the cost of filing the return electronically exceeds the cost of filing by paper.
To apply for a waiver, employers must submit IRS Form 8508. If an employer/plan sponsor is considering applying for the waiver, they are encouraged to file the IRS Form 8508 at least 45 days before the due date (March 31) of the returns but no later than the due date. If the waiver is granted, it is only valid for that year.
The general ACA reporting penalty is $290 (for 2023) per return for failure to timely and properly file the forms with the IRS. These penalties apply to an employer’s failure to file electronically where required.
While every effort has been taken in compiling this information to ensure that its contents are totally accurate, neither the publisher nor the author can accept liability for any inaccuracies or changed circumstances of any information herein or for the consequences of any reliance placed upon it. This publication is distributed on the understanding that the publisher is not engaged in rendering legal, accounting, or other professional advice or services. Readers should always seek professional advice before entering into any commitments.