Form 1095-C is an essential tax document for employers and employees alike. It provides crucial information about health coverage offered and received. With the tax season approaching, it’s vital to understand this form, its deadlines, and the potential penalties for late filing.
What Is Form 1095-C?
Form 1095-C is issued by applicable large employers (ALEs) to provide information about the health coverage they offer to their employees. The IRS uses this form to determine whether an employer should pay a penalty for failing to offer affordable, minimum essential health coverage. Additionally, it helps employees understand the type of coverage they receive during the year.
What Deadlines Do You Need to Be Aware Of?
For the 2023 tax year, employers need to be vigilant about the ACA e-file deadline and their reporting requirements for 2024. The 1095-c deadlines for the 2023 tax year are as follows:
- Recipient copy: March 04, 2024
- Paper filing: February 28, 2024
- E-filing: April 01, 2024
Some states also require employers to report health coverage information. For instance, the 1095-c deadline for the District of Columbia, New Jersey, Massachusetts, California, and Rhode Island ranges from January 31, 2024, to April 30, 2024.
How to Properly Fill Out Form 1095-C?
Part 1: Employee and Applicable Large Employer
This section captures the basic details of the employer and the employee. It includes the employer’s name, address, and employer identification number (EIN), as well as the employee’s name, social security number, and address.
Part 2: Employee Offer of Coverage
Here, employers provide details about the health coverage offered to the employee. It includes codes that describe the type of coverage offered, the employee’s share of the monthly premium, and the months the employee was enrolled in coverage.
Part 3: Covered Individuals
This section lists all the individuals covered under the employee’s health plan, including dependents. It provides details like names, social security numbers, and the months they were covered.
Penalties for Late Filing of Form 1095-C
Employers must be diligent in filing Form 1095-C on time. Failing to file or furnish a correct return can result in a penalty of $290 for each return, with the total annual penalty not exceeding $3,532,500. To avoid these penalties:
- File your 1095-C on or before the due date.
- Ensure accurate information is provided.
- File electronically if required. For instance, if an employer has more than 10 Forms to file, electronic filing is mandated.
Who Receives Form 1095-C?
Applicable Large Employers (ALEs) issue Form 1095-C to full-time employees. It provides information about the health coverage offered to them and their dependents.
Where Do I Find Form 1095-C?
Your employer should provide you with Form 1095-C. If you haven’t received it, contact your HR department or the person responsible for employee benefits in your organization.
Do I Need to File Electronically?
Employers with more than 10 Forms 1095-C are mandated to file electronically. If they paper file in such cases, they may face penalties.
Do I Need My Form 1095-C to File My Taxes?
While you don’t need to submit Form 1095-C with your tax return, it’s essential to keep it for your records. It provides proof of the months you and your dependents had health coverage, which can be crucial for tax purposes.
Understanding Form 1095-C is crucial for both employers and employees. While it might seem complex, breaking it down section by section can make the process more manageable. Always ensure timely and accurate filing to avoid potential penalties and ensure compliance with the ACA requirements.