Due Date for Furnishing IRS 2018 Forms 1095-C Extended

On Nov. 29, 2018, the Internal Revenue Service (IRS) Notice 2018-94 announced the extension of the due date to furnish 2018 health coverage information forms to employees. Applicable Large Employers (ALEs) now have until Mar. 4, 2019 to provide Forms 1095-C to individuals.

Transition Relief from Accuracy Penalties
The IRS also extended transition relief from penalties under Sections 6721 and 6722 to ALEs that can demonstrate that they made good-faith efforts to comply with the Form 1095-C reporting requirements under Section 6056 for 2018; both for furnishing to individuals and for filing with the IRS, for incorrect or incomplete information.

Accuracy penalties can be up to $270 per return for failure to file and failure to furnish accurate and timely information returns, up to an annual cap of $3,275,500 ($1,091,500 for employers with gross receipts under $5,000,000). Separate penalties under Sections 6721 and 6722 may apply to filing and furnishing, so the aggregate penalty could be $540 per statement, up to $6,564,000 per year. The IRS has generally not asserted such penalties systemically for Forms 1095-C or Forms W-2, but enforcement policy may change in the future.

To avoid such penalties, employers may need to follow Publication 1586 guidance to check with employees if they become aware of a name/SSN error. For example, the IRS electronic filing system for Forms 1095-C notifies employers of any errors in names and SSNs. These error notices are not an IRS Notice 972CG; i.e., do not require a specific solicitation, but it may be reasonable under the circumstances to check the employer’s records to confirm that the information provided by the employee was transcribed correctly; and, if so, to ask affected employees to verify that the information provided matches the name and Social Security number on their Social Security card.