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Tips for Filing 1095-C

Tax season is just around the corner. Under the Affordable Care Act, large employers must provide information regarding their employees’ health insurance coverage on form 1095-C. Keep in mind that ‘large employer’ is one that has at least 50 full-time employees on staff. Employers are also required to file this form with the IRS on paper or electronically (online e-filing). Now that it’s the end of the year, chances are that your organization is busier than ever. But it’s imperative to take the steps now toward completing form 1095-C for your employers. Keep reading for e-file tips.

  1. Use your 2016 employee count to determine your status for the 2017 filing year – Here’s the thing: Your large employer status is determined each calendar year. Depending on any layoffs and/or new hires, your workforce total varies from one year to the next. For 2017 only, you may use any consecutive six months of 2016 to determine if you are a large employer. Those who have fewer than 50 employees in their organization aren’t necessarily off the hook, though. Consider asking a professional if you still have an ACA filing requirement.

  2. Multiple companies with a common owner must combine their workforce totals when determining large employer status – Let’s say the combined total of their full-time employees is greater than or equal to 50. In this case, each separate company is considered a large employer even if their individual workforces alone don’t total 50 or more. Not only that, but each separate company must complete form 1095-C for any applicable employees.

  3. Large employers are required to file form 1095-C for every one of their full-time employees regardless of whether coverage is offered – Some employees decide to waive health coverage that is offered. That said, form 1095-C must still be filed for this employee. Such filing may seem like an unnecessary inconvenience, but it’s required.

  4. Be extra careful when handling employee terminations and coverage – Even after an employee leaves your organization, you still may need to report information on form 1095-C about the coverage offered during the month the termination occurred. Consider this instance: If an employee terminates employment on any day other than the last day of a month and the coverage or coverage off expires upon termination of employment, then you must enter code 1H on line 14. Then again, if the coverage or coverage offer would have continued should the employer had not terminated employment during the month, be sure to enter 2B on line 16.

  5. Not all large employers are required to enter a code on line 16 of form 1095-C – It’s important to know that Line 16 is used to indicate whether the large employe qualifies for an exception to the penalty. Remember to leave line 16 blank if no code is applicable for a given month.

Now that you know more about form 1095-C, let’s dive into two of the more commonly asked questions. First, what is the deadline to file form 1095-C? Well, it’s the end of February if filing on paper. If choosing to e-file, the deadline is the end of March. Just know that the deadline to provide employee copies is the end of January. Next, let’s review the potential penalty for failure to file form 1095-C. For 2017, the IRS will not impose penalties for filing incorrect or incomplete information if the filer/employer has made a good faith to comply with the reporting requirements. Employers that fail to file in a timely fashion may still be eligible for penalty relief if the IRS deems the standards for reasonable cause are satisfied.

Why Choose Online E-Filing?

OnlineFileTaxes.com is the preferred e-file provider nationwide. We make it easy and affordable to file your 1099 forms and other tax documentation. You can rest easy knowing your online files are electronically sent to the IRS for hassle-free filing. By working with us, there’s no need to scramble to the mailbox or office of a tax professional. For your convenience, we even print and mail recipient copies for you to keep for record purposes.

Our e-filing services are geared toward business owners, CPAs, accounting professionals, as well as benefits providers. Thanks to OnlineFileTaxes.com, you can process any number of forms seamlessly and economically. Gone are the days of needing to buy lengthy forms and expensive software. Plus, you’re able to do away with administrative and IT costs associated with year-end processing.

We understand that filing online tax forms is anything but fun. It’s no question you want to spend as little time as possible messing around with 1095’s, 1098’s, and 1099’s. Instead, you would rather put the time toward running and improving your business. OnlineFileTaxes.com allows you to file hundreds of forms in minutes.  

There’s no need to look anywhere else for your e-filing needs this tax season. Sign up for free and receive forms for as low as $1.25, including printing, mailing, and e-filing.

 

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Tips for Filing 1099-MISC

Tax season is just around the corner. As a business owner, you’ve gotten into the habit of waiting until the last second to prepare those necessary forms. But what if you bucked that trend this year? In the coming weeks, you will want to send annual reports to contract workers you paid in 2017. If you aren’t already aware, Form 1099-MISC is what you are required to send independent contractors. We hope this post will serve as a guide to properly prepare and file the form.

What to Do Before You File 1099-MISC

  1. Check the year on tax forms – The Balance reiterates that the Internal Revenue Services changes 1099’s every year. With that in mind, be sure you have the correct year. Note that if you are sending a contractor a 1099-MISC form for 2017 work in January 2018, use the 2017 form.

  2. Send 1099-MISC to independent contractors, not employees – Remember that this form isn’t to be given to employees. The 1099 form is meant to be sent to outside companies and contractor workers who you paid at least $600 for the year. Full-time employees, meanwhile, should receive a W-2, which we will touch on in future posts.

  3. Ensure you have a W-9 form for each payee – A W-9 form must be completed before you send a 1099-MISC to an independent contractor. What exactly is the purpose of a W-9? Without making it too complicated, it’s used to verify that person’s tax identification number.

  4. Order 1099-MISC forms and use the correct one – Now is the time to order the necessary forms for this tax year. Should you have a payroll service, be sure they have what they need to properly file 1099-MISC forms come January. One quick tidbit on the form itself: You must use the official one. You can’t use a 1099-MISC form you download from the Internet because the red ink on Copy A is unable to be copied.

  5. Check for errors before you submit to the IRS – Folks make a number of mistakes when they go to file 1099 forms. From using the form for the wrong year to sending the form to the wrong company and failing to include all requested information, things happen that significantly delay the process. That’s why it’s imperative to double-check the forms prior to submitting to the IRS.

  6. Record payments in the correct year – This is more complex than it sounds. Let’s say your company is paying a contract worker for the last week in December. However, what makes things tricky is the check was dated in January. So what year should that payment be recorded? Well, that income counts toward January.

More About Form 1099-MISC

Keep in mind that 1099-MISC forms can include rent, royalty, prizes, and awards. Typically, payments made to corporations are not reported on this form. There are exceptions to this rule in some cases. Don’t forget that medical/health care payments and attorneys’ fees must be reported on 1099-MISC forms. All businesses operating for the purpose of making a gain or profit is required to file this form. This includes the likes of nonprofit organizations, trusts, cooperatives, and government agencies.

When is Form 1099-MISC Filed?

1099 preparation is required if a business:

  • Paid at least $10 in royalties, brokerage payments, or tax-exempt interest

  • Paid at least $600 in rent, services, awards, other income payments, and medical payments

  • Paid at least $600 to an attorney

  • Made direct sales of at least $5,000 worth of consumer products

  • Withheld any federal income tax under the backup withholding rules

 

We are occasionally asked the question, “What’s the penalty for not filing Form 1099-MISC?” The answer is this: You can expect the IRS to impose heavy penalties on your business if the form is not filed or filed properly. Be aware that there is a penalty for not providing recipient copies. Over time, the penalty only increases. That said, it’s critical to file as soon as possible.

E-File 1099 Forms Today

Let this be the year you take control of tax season. OnlineFileTaxes.com is the most cost-effective way to file your 1099 forms, including Form 1099-MISC. Thanks to our online tax reporting service, you can file Form 1099 online in minutes.

 

What exactly makes OnlineFileTaxes.com different from other 1099 preparation services? Here are just a few of the major benefits:

  • Allows you to process any number of tax forms, seamlessly and economically

  • Takes away the need to buy and fill out long forms

  • Eliminates the need to invest in software or administrative/IT costs

  • The copy of 1099 Forms is electronically sent to the IRS for fast, simple, and stress-free filing

  • We print and mail recipient copies for you to keep for record purposes

 

It’s time to e-file 1099-MISC. Turn to OnlineFileTaxes.com for all your filing needs this tax season. Let us help you tackle 1099-MISC online.

 

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What to Know About Your W-2 Form

Also known as the “Wage and Tax Statement,” W-2 Forms are an integral part of tax preparation. Your W-2 shows the amount of taxes withheld from your paycheck in a given year. Whether you’re getting a W-2 for the first time or could use a refresher on the form, keep reading to learn more.

W-2 Wages and Withholding

Be aware that you should only receive a W-2 Form if you are an employee. Should you be self-employed or an independent contractor, expect to receive an earnings statement on a 1099 Form instead. For the sake of this post, let’s focus on a W-2 Form. For one, it’s divided into boxes that report numerous items related to your income. When you first receive a year’s W-2, take a close look at box 1. This is where you will find your annual wage and salary payments with the amount of federal tax withheld from it in box 2.

It’s important to know that since only a fraction of your income is subject to Social Security tax, you may find that box 3 report an amount that’s less than the year’s total wages. Wages subject to Medicare and Social Security taxes can also be found in boxes on the form.

What’s Important About Your Tax Withholding?

Take a close look at your next paycheck. When an employer withholds amounts from your paycheck for federal income taxes, those amounts are remitted to the Internal Revenue Service throughout the year. In turn, the amount your employer reports on the W-2 must be subtracted from your tax bill when you prepare a federal return. It’s at this point when you know whether to expect a refund or make an additional tax payment.

Verifying Your Identity

The IRS expects the income you report on your taxes to match the information on your W-2. If it doesn’t, they will want to know why. What a lot of folks fail to realize is that since the IRS gets a copy of your W-2, it already knows if you owe tax and will likely contact you if you fail to file a return. So don’t stand pat if the name or Social Security number on your W-2 is inaccurate. Report the mistake to your employer as quickly as possible so they can resolve in time for filing.

Common Questions About W-2 Forms

Now that you have some additional background information on W-2 Forms, let’s get into some frequently asked questions.

  1. Who needs to file it? – Any employer engaged in a trade or business that pays remunerations for services performed by an employee must file a W-2.

  2. When is it filed? – An employer must file a W-2 if they paid remuneration, including non-cash payments of at least $600 or they withheld any income, Social Security, or Medicare tax.

  3. What’s the deadline? – The deadline to file your W-2 is the end of February if filing on paper. You have a bit more time if e-filing, however, as the deadline is toward the end of March. Employers should know that they have a January deadline to provide employees with their copies.

  4. What’s the penalty for not filing a W-2? – If a business fails to file a W-2, they can expect heavy penalties to be handed down from the IRS. There’s also a penalty should you not provide recipient copies. As with 1099 Forms, penalties only increase with time. That’s why it’s imperative to file as soon as possible.

How OnlineFileTaxes.Com Can Help

Whether you’re a business owner or independent contractor, you don’t have time to mess around with tax forms. That’s where online e-filing comes into play. OnlineFileTaxes.com allows you to send those necessary forms to the IRS for fast, efficient, and simple filing. For years, we have been utilized by small business owners, CPAs, accounting professionals, and individuals. Our team is proud to offer a variety of filing options for your convenience.

So why use us when there are countless other online tax reporting services? For one, OnlineFileTaxes.com allows you to process any number of forms seamlessly and economically. Not only that, but we eliminate the need for expensive software or unsightly administrative/IT costs associated with year-end 1099 processing.

Whether you want to e-file W-2 forms or start on 1095 filing, we can help. Here are some other online tax forms you can expect to find on our site:

Take it from Linda Quinn, one of our recent customers. She says, “Having missed my payroll services deadline, I had to, at the last moment, go online and search for a company to prepare our 1099’s. I selected OnlineFileTaxes after looking at several sites. I was very happy with the price, timeliness, and the end result. Thanks for a job well done. I may use you again this year.”

Don’t let tax season get you down once again. Let OnlineFileTaxes.com help you take charge. Begin the online e-filing process now.

 

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Tips for Filing 1095-B

Form 1095-B revolves around health coverage. Essentially, it reports the type of coverage you have, dependents covered by your insurance policy, as well as the period of coverage for the prior year. Form 1095-B verifies that you and your dependents have at least minimum qualifying health insurance coverage. If for whatever reason you had a break in health care coverage for the tax year, you may have to pay a tax penalty.Keep reading to learn more about filing Form 1095-B.

Minimum Essential Coverage

Keep in mind there is a minimum level of benefits your insurance must provide for you to avoid paying that tax penalty. Here are the types of insurance that provide such coverage:

  • Employer-sponsored health plans – These can include coverage for retirees, as well as “COBRA” coverage for former employers.

  • Government health care plans – Here is where Medicare Part A, Medicare Advantage, Medicaid, the Children’s Health Insurance Program, and other similar plans fall into place.

  • Coverage purchased through the “Marketplace” – Under the Affordable Care Act, these consist of web-based federal and state insurance markets.

  • Any individual health insurance policy you had in place before Obamacare took effect.

What to Know About Form 1095-B

There are four parts to this form. Here’s what you can expect with each:

  • Part I – This identifies the person whose name is on the policy. This would be the name of the employee for an employer-sponsored plan.

  • Part II – If your coverage happens to be employer-sponsored, this part will identify the employer.

  • Part III – This section identifies the insurance company who is providing the coverage.

  • Part IV – This is easily the most extensive part of the form. Part IV lists the people in your household who are covered by the insurance. Be aware that for each name, there is a box that will be checked if the person was covered for all 12 months of the year. If that person wasn’t covered for the entire year, there is a box for each month. Again, there will be a penalty assessed with partial coverage (in the majority of cases).

Why Form 1095-B is So Important

Submitting Form 1095-B is proof that you had coverage required by the Affordable Care Act. But what about the penalties? If you fail to file correct information returns or fail to furnish a correct employee statement, you may be subject to a penalty. Gaps in coverage of three months or less are exempt from the penalty. With that said, the IRS will not impose a penalty for filing incorrect and/or incomplete information if the filer/employer has made the effort to comply with reporting requirements. Those who are uninsured may still be able to avoid a tax penalty if they have an exemption. These are available for several reasons such as financial hardship and membership in certain groups.

 

As far as the deadline is concerned, you must file Form 1095-B by the end of February. However, if filing electronically, the deadline is the end of March. Employees must be provided their copies by the end of January.

Why Choose Us for Online E-Filing?

OnlineFileTaxes.com is an e-file provider approved by the Internal Revenue Service. With us, you can quickly and easily e-file 1099 forms. Feel at ease knowing that your online files will be electronically sent to the IRS for fast, efficient, and hassle-free filing. Whether you’re a business owner, CPA, accounting professional, or individual, you can reap the benefits of OnlineFileTaxes.com.

 

There are plenty of e-file options out there. So why choose us? For one, you can easily manage all of your 1099 tax forms with our do-it yourself online service. Why worry about mailing delays and spending countless hours filling out lengthy forms. OnlineFileTaxes.com does the following:

  • Allows you to process any number of forms seamlessly and economically

  • Removes the need to buy and complete a myriad of forms

  • Eliminates the need to invest in any software

  • Takes away any administrative and IT Costs associated with end-of-year 1099 processing

  • Prints, mails, and electronically files with the IRS once the forms are completed

  • Supports uploading Excel files as opposed to manually filling out forms and being more susceptible to making a mistake

How to E-File

Take your pick between three convenient options:

  1. E-File + print + mail – Let us take care of your e-filing needs with the IRS. We will also print and mail (or e-deliver) copies to recipients.

  2. E-file only – Maybe you have already provided copies to your recipients and just want us to report to the IRS. If that’s the case, this is the ideal choice.

  3. Print and mail only – Allow us to print and mail recipient copies. It could be that you have previously submitted information to the IRS but want us to provide recipient copies. In this instance, this third option makes the most sense.

 

Whether you want to e-file W-2 Forms, 1098-MA, 1095-C, or 1095-B, we can help. Get started e-filing today.

 

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Why Choose Us for Online E-Filing?

OnlineFileTaxes.com is an e-file provider approved by the Internal Revenue Service. With us, you can quickly and easily e-file 1099 forms. Feel at ease knowing that your online files will be electronically sent to the IRS for fast, efficient, and hassle-free filing. Whether you’re a business owner, CPA, accounting professional, or individual, you can reap the benefits of OnlineFileTaxes.com.

There are plenty of e-file options out there. So why choose us? For one, you can easily manage all of your 1099 tax forms with our do-it yourself online service. Why worry about mailing delays and spending countless hours filling out lengthy forms. OnlineFileTaxes.com does the following:

  • Allows you to process any number of forms seamlessly and economically
  • Removes the need to buy and complete a myriad of forms
  • Eliminates the need to invest in any software
  • Takes away any administrative and IT Costs associated with end-of-year 1099 processing
  • Prints, mails, and electronically files with the IRS once the forms are completed
  • Supports uploading Excel files as opposed to manually filling out forms and being more susceptible to making a mistake

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How to E-File

Take your pick between three convenient options:

  1. E-File + print + mail – Let us take care of your e-filing needs with the IRS. We will also print and mail (or e-deliver) copies to recipients.

  2. E-file only – Maybe you have already provided copies to your recipients and just want us to report to the IRS. If that’s the case, this is the ideal choice.

  3. Print and mail only – Allow us to print and mail recipient copies. It could be that you have previously submitted information to the IRS but want us to provide recipient copies. In this instance, this third option makes the most sense.

 

Whether you want to e-file W-2 Forms, 1098, 1099-MISC, 1095-C, or 1095-B, we can help. Get started e-filing today.

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Important Deadline Changes for W-2, W-3, and 1099-MISC

The IRS (Internal Revenue Service) has changed the guidelines for the filing of W-2, W-3, and 1099-MISC forms. These changes impact companies of all sizes. It’s important for businesses to be aware of any amendments to remain compliant and to avoid costly penalties.

PATH Act Implications

The PATH (Protecting Against Tax Hikes) Act is a new bill passed in 2015. The bill alters the deadlines of three forms – W-2, W-3, and 1099-MISC – and their variations. Organizations now have less time to make corrections or validate the data they used to complete the forms. The reduced timeframe could lead to more errors which could increase tax penalties at the new higher rates.

The tax information reporting requirements are becoming increasingly difficult for organizations. The reasons include the addition of new forms, changes to existing forms, new deadlines, and the amendments to tax codes, to name just a few. Also, one minor change has a ripple effect and leads to necessary adjustments in other areas. Not only is it more time-consuming to remain compliant, but it is also more expensive. Many companies don’t have staff with the expertise to handle all of these changes efficiently. The reduced timeframe could lead to more errors which could increase tax penalties at the new higher rates

Changes in Filing of W-2 and W-3

The new due date for filing W-2 and W-3 with the SSA (Social Security Administration) is January 31, 2017. The filing due date also pertains to Forms W-2AS, W-2CM, W-2GU, W-2VI, and W-3SS. The filing date is the same whether you file electronically or mail out paper forms.

An extension to file Form W-2 with the SSA is no longer automatic. Companies now have to request a one-time 30-day extension. However, the IRS rarely permits an extension unless there is an extreme situation that prevents compliance by the due date.

There are now higher penalties for tax returns filed after Dec. 31, 2015. The penalty amount is adjusted for inflation.

Changes for Filing Form 1099-MISC

For the filing of Form 1099-MISC, the new due date is Jan. 31. 2017 if companies are reporting nonemployee compensation payments using Box 7. If companies do not report on Box 7, the deadline for filing a paper 1099-MISC forms is Feb. 28, 2017, and March 31, 2017, for filing electronically.

For electronic filing, companies need to use the FIRE (Filing Information Returns Electronically) System provided by the IRS. FIRE is only for the transmittal of forms. It allows fill-ins for only two forms, one of which is Form 8809, Application for Extension of Time to File Information Returns.

If a company needs an extension for filing the 1099-MISC, it must make a request by the deadline. A 30-day extension is granted only in extreme cases. It’s important to file the 1099-MISC by the due date because the penalties continue to increase.

As tax information reporting becomes more complicated, companies struggle to keep up-to-date with the new ever changing requirements. The PATH Act has added a new layer of compliance with the altered deadlines for W-2, W-3, and 1099-MISC forms.

At www.OnlineFileTaxes.com we strive to provide you a timely service at very affordable prices.

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Counting Your Workers Mid-Year for Better ACA Compliance

As part of the ACA (Affordable Care Act), large employers have to provide affordable health care plans to full-time employees or FTEs. The companies also have to report health coverage information on an annual return to the Internal Revenue Service (IRS.) With employee turnovers and changes in staffing, it’s a good idea to count the number of employees you have at the mid-year mark to determine who qualifies as a full-time employee. By doing this, your company is in a better position to remain compliant with the ACA reporting requirements.

Definitions of Employee and Large Employer

An employee performs services for a company, and the employer has the right to control and manage that individual. The employee is told by a supervisor what work is to be performed, and when, where and how that work is to be completed.

An applicable large employer (or ALE) is defined as a company with 50 or more full time employees. A FTE is a person who works 30 or more hours each week on average, or 130 hours or more each month.

Mid-Year Checklist

As part of operations, companies have to plan and budget for the coming year. This includes new hires and staffing costs. The mid-year mark is the perfect time to assess the status of every person who works for your company. This assessment tells you who in your company qualifies to be considered an employee and whether they are a full-time employee.

Keeping track of your workforce helps you to reduce costs by avoiding tax penalties. For companies that don’t offer affordable health coverage to at least 95 percent of its full-time employees, the IRS will impose penalties. The penalties can be huge if a full-time employee gets a premium tax credit from the federal government to buy health insurance coverage from an ACA exchange.

Independent Contractors

If your company uses independent contractors who work long-term and whose work is essential for your business, they may be considered employees. You have to carefully assess these independent contractors, especially if you are close to having 50 full-time employees. You also have to take into consideration the fact that adding them to your workforce might result in your failure to offer health insurance to at least 95% of your full-time employee. Employers also need to look closely at any independent contractor uses a Social Security number as the Taxpayer ID number. By scrutinizing accounts payable records, employers have a better understanding of how to categorize their workers.

Temporary Employees

If you have temporary employees working in your company, you need to review your contract with the staffing agency to determine if you or the staffing firm is the employer. You also need to know if these temps are covered under your health care plan or should be. Alternatively, the temporary, part-time, seasonal and variable-hour employees may be covered under the staffing agency that employs them. In some situations, you can take credit for health coverage if the third-party staffing agency offers these workers minimal essential coverage and also charges you an additional fee any temp that accepts health coverage.

Another important issue is that temporary employees, whether full-time or part-time, are included when calculating full-time equivalents to determine if your company is an applicable large employer. Proper assessment of temporary employees who work full-time will determine if you offer 95% of your full-time employees health coverage.

If you use a temporary staffing agency, the IRS usually deems the workers to be employees of the staffing agency and not your company. However, you need to do your due diligence and review all contracts with a temp staffing agency to ensure that you are not in a PEO arrangement.

Professional Employment Organization

Many large companies hire a Professional Employment Organization (PEO) for the hiring of new employees while also taking care of payroll, employee benefits, and other human resources services. You need to review your contact with the PEO to make certain the organization provides affordable health insurance to each full-time employee the PEO provided for your company. The PEO should charge you a fee for any employee who elects to receive health coverage. This arrangement between a PEO and your company complicates ACA compliance. It’s a good idea to seek legal advice to ensure you and the PEO meet all ACA requirements.

Other Issues with Staffing Companies

Many different staffing arrangement models exist, and this has an impact on how staffing agencies and their clients report health coverage and workforce numbers. The third-party staffing company complicates matters because different approaches are necessary to ensure compliance. For example, some large employers recruit new hires and then refer them to a staffing agency that acts as the worker’s employer. As the employer, the staffing agency is responsible for payroll and benefits. For the IRS, this type of hiring process is a grey area and often results in more scrutiny of your annual returns. You should analyze the pros and cons of such a staffing relationship.

With the ACA laws being so complex, it’s essential that you categorize every worker properly to ensure that your company is in compliance with all the ACA rules and regulations.

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What are the ACA Reporting Requirements?

The Affordable Care Act (ACA) reporting requirements are on the minds of employers, C-level executives and business owners. With hefty penalties for not providing the right information on the annual returns and for not filing before the deadlines, companies realize that they need to understand what health insurance coverage data they have to report and when. The ACA laws are complicated, but companies must follow them to be compliant with the Internal Revenue Service (IRS).

The New Requirements

An applicable large employer (ALE) is required to submit two forms known as the C-Forms. These forms are IRS Form 1094-C and IRS Form 1095-C. Large employers are companies with 50 or more full-time employees. A full-time employee (FTE) is a person who works 30 hours or more per week or 130 hours per month. Under certain conditions, other reporting forms are required known as the B-Forms. These forms are 1094-B and 1095-B.

IRS Form 1094-C

Form 1094-C is titled the Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns. The 1094-C is submitted to the IRS and provides information about a company’s full-time employees. The information includes the type of health insurance the company offers full-time employees and the time period that the health insurance covers. This form is also used for the company to tell the IRS about its workforce, such as the number of full-time employees and the number of part-time employees.

IRS Form 1095-C

IRS Form 1095-C is titled Employer-Provided Health Insurance Offer and Coverage Insurance. The 1095-C uses the same information provided in Form 1094-C, but the employer sends this form to employees. Every FTE has to receive the 1094-C. The employees who are not required to get a C-Form are those in a waiting period to start receiving health coverage. Employers are also not required to give a C-Form to variable-hour employees who are currently in an administrative period.

IRS Forms 1094-B and 1095-B

There are other reporting forms required by the IRS known as the B-Forms. They are IRS Form 1094-B and IRS Form 1095-B. Form 1094-B is titled Transmittal of Health Coverage Information Returns. Form 1095-B is titled Health Coverage. Insurance companies that underwrite an employer-sponsored health care plan and companies that self-fund their health insurance plans are required to supply health insurance coverage information to the IRS and also to the individual who is insured either under the underwritten employer plan or the self-insured plan. Employers send the 1094-B form to the IRS and the 1095-B form to the insured employee.

The IRS permits self-insured employers to report its B-Form information on Part lll of the 1095-C form sent to employees. This combined reporting helps to simplify the reporting process. Employers who have fully-insured health care coverage do not need to send out B-Forms, only the insurance companies underwriting the plans have to submit B-Forms.

Reporting Requirements for Small Employers

There are also some ACA reporting requirements for small employers. A small employer is any company with fewer than 50 full-time employees. If a small employer offers self-insured health insurance to its full-time employees, it has to report this information on the B-Forms.

 

Deadlines for Filing C-Forms and B-Forms

The deadline for companies to send 1095-C and 1095-B to each of its full-time employees is Jan. 31 for the prior year’s coverage. Employers also have to send the 1094-C and the 1094-B forms to the IRS. For companies that need to send out less than 250 forms, the deadline is Feb. 28 for the prior year’s coverage. These employers have the option of submitting the forms to the IRS on paper or submitting them electronically. However, if sent on paper, the deadline is Feb. 28. If sent electronically, the deadline is March 31.

For companies that send out 250 or more C-Forms and B-Forms to the IRS, the deadline is March 31 for the prior year’s coverage. All submissions must be filed electronically through the ACA Information Returns (AIR) system set up by the IRS. The system allows for the e-filing of all ACA forms.

Other Important Information for Employers

The IRS imposes penalties for employers filing forms incorrectly, or filing forms after the deadlines. However, for employers with 50 to 99 full-time employees, there is often no penalty tax.

Large employers have the option of hiring third-party vendors to submit the ACA required forms to the IRS and to the full-time employees. Although this can make the submission process more efficient, every company is still responsible for submitting accurate C-Forms and B-Forms before the deadlines. If a vendor makes errors when filing the forms with the IRS, the employer is liable and can face penalties. The third-party vendors are also subject to the same requirements applicable to third-party tax return preparers.

The Reasons for ACA Reporting Requirements

Congress enacted the reporting requirements for two important reasons. The first is a way for the IRS to know if large employers are offering their full-time employees affordable health insurance. Alternatively, the reporting requirements tell the IRS if companies are paying the penalty tax for not providing health coverage. By requiring the forms, the IRS knows which companies should pay the penalty tax.

Another reason for the reporting is to help the IRS to verify whether or not individual employees are eligible for the premium subsidy. The IRS can determine this once the agency knows the type of health insurance coverage offered by the employer and whether the employees offered the health plan are full-time or part-time.

Because the IRS now imposes a penalty tax for adults who don’t have health insurance, the reporting requirements help the IRS to keep track of people who have health insurance, and people who have to pay the penalty tax because they haven’t obtained health care coverage.

The ACA reporting requirements are important for a number of reasons. The best way for large employers to ensure compliance is by understanding what is expected of them. The IRS website has the ACA Information Center that describes and explains C-Forms and B-Forms and offers other information employers need to know.

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Challenges for E-filing ACA Forms

Large employers are required to report information about their health care plans, but companies are facing challenges in filing the Internal Revenue Service (IRS) forms electronically. The Affordable Care Act (ACA) mandates require employers to report the type and the cost of health insurance offered to full-time employees. However, many companies use an HRIS (human resource information system) to create the necessary forms. Unfortunately, these systems don’t have the ability to file the forms electronically with the IRS. This inability to e-file is causing problems for large employers.

The Issue with Third-Party Vendors

One solution is for large employers to use third-party vendors or outsourced professional to help them submit the IRS Forms 1094 and 1095 electronically. The vendors are usually businesses that transmitted 1099s to the IRS. These companies then entered the ACA e-filing business to offer additional services to customers.

The IRS set up the ACA Information Returns (AIR) system that allows employers to e-file the ACA forms. While this streamlines the process, the main issue is that the E-File vendors submitting the forms for their clients don’t understand the ACA reporting requirements. This means that the vendors can’t help the large employers who need to file these new forms. Employers don’t get assistance in filing the right forms or in avoiding errors. All of these issues could lead to ACA filing penalties for the employers.

Large Employers and Compliance Problems 

Another issue is ACA e-filing compliance. IRS form 1095 is a Protected Health Information (PHI) form. This means that employers need to use HIPAA (Health Insurance Portability and Accountability Act) and HITECH (Health Information Technology for Economic and Clinical Health) compliance policies. To protect information, employers have to submit the ACA forms securely to their vendors, and this includes encryption.

Still, another challenge for large employers is that the “Good Faith Effort” provision is about to expire. Once the expiration date passes, all employers will be responsible for submitting accurate ACA forms to the IRS to avoid penalties.

Although many employers are experiencing a variety of problems with submitting the ACA forms, one option is to find and use the right e-filing vendor. In any event, employers are the ones who face stiff penalties, so it is your responsibility to follow the rules, and to submit accurate ACA forms before the deadline.

If you have questions related to ACA filing please visit www.OnlineFileTaxes.com or www.Outsource1095.com or talk to our ACA experts at 1-866-62 e-file (1-866-62 3-3453). We know the issues employers are having and we would be able to help you at a very reasonable cost.

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