Sure about deadline for distributing Forms 1095-C to employees?
Although IRS hasn’t yet issued final regs giving you extra time to distribute Forms 1095-C to employees, employers can be confident about the deadline.
That’s because of a statement IRS made in the proposed regs, released December 6, 2021.
First things first, what’s the upcoming deadline for getting Forms 1095-C to full-time employees? March 2, 2023.
Notably, that’s 30 days after January 31, 2023.
You may recall that when the Affordable Care Act (ACA) passed – over a decade ago – the law set the end of January each year as the deadline for applicable large employers (ALEs) to furnish the forms to full-time employees.
Since then, year after year, IRS has issued an automatic extension of time. That helped employers out, because they didn’t have to file Form 8809, Application for Extension of Time to File Information Returns, seeking an extension themselves.
30-day automatic extension of time
But in 2021, IRS decided to make it official. The proposed regs laid out an automatic extension of time for ALEs.
Under the proposed regs, the due date for furnishing Forms 1095-C to full-time employees would be extended by 30 days. That said, if that date would fall on a weekend or a legal holiday, you’d have until the next business day.
While we’re still waiting on the final regs, we’re not left wondering. Here’s why: According to the proposed regs themselves, the proposed regs can be relied on for calendar years beginning after December 31, 2020, and before the date final regs are published.
What’s more, in the draft version of 2022 Instructions for Forms 1094-C and 1095-C, released October 6, 2022, IRS clearly stated that March 2, 2023, is the deadline for furnishing the statements to recipients.
IRS also explained in the proposed instructions that in light of the automatic extension, no additional extension will be granted beyond the 30 days. That’s been par for the course.
Sending out Forms 1095-C
For Payroll, doublechecking who’s a full-time or full-time equivalent employee can help keep your company on track.
Remember, an ALE is generally an employer with 50 or more full-time or full-time equivalent employees.
Under the ACA, a full-time employee is someone who works an average of at least 30 hours per week for your company. These employees should be counted when you’re trying to determine if you’re an ALE – and if you are, they should receive Forms 1095-C by the deadline.
As for full-time equivalent employees, they don’t need to receive Forms 1095-C, but they must be included when determining if you’ve reached the 50-employee threshold.
Let’s say you have three part-time employees, each working an average of 20 hours per week. All together, their hours add up to an average of 60 hours per week. Therefore, for purposes of deciding if you’re an ALE, you’d add two full-time equivalent employees to your count.
If you have seasonal workers, though, an exception may apply.
Whether or not you’re an ALE, you know how important it is to stay current with IRS regulatory changes involving the ACA. We’ll let you know when final regs are released.
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