The IRS released the draft instructions for Forms 1094-C and 1095-C on November 13, 2019. And while many, including us, believe there would be some changes due to the reduction of the Individual Mandate to zero dollars, the draft showed little to no changes compared to the previous year.
The changes made in the instructions refer mainly to numerical figures that change year-to-year due to inflation. On page six, the second column section, “Information reporting penalties,” states the total penalty charged for a calendar year will not exceed $3,339,000, a $64,000 increase from 2018. Another noted change is found on page 12, second column, in the final note before Part III. The affordability thresholds under section 36B reflect 9.56% for the 2018 plan year but increased to 9.86% for plan years beginning in 2019.
In regards to the Individual Mandate, the only notable change is found on page one, second column, under “Who Must File.” Previously the wording discussed the IRS used Form 1095-C to assist in determining if an employee is subject to the Individual Mandate. This applies to employers who sponsor a self-insured health plan only. The draft instructions no longer mention the Individual Mandate.
The remainder of the draft stays unchanged from the previous year. Employers are still required to provide the Form 1095-C to their eligible full-time employees by the January 31, 2020 deadline. Employers who file electronically must submit their completed forms to the IRS by March 31, 2020. Employers submitting paper files must have them to the IRS by the February 28, 2020 deadline.
For more information regarding changes and updates to the IRS filing rules and regulations, please CONTACT US. The information contained in this article is intended to be used for informational purposes and does not constitute legal advice or tax opinions. When needed, contact your legal counsel for assistance and clarifications.