What does a 1095-C delay mean for 1040 filings?

What does a 1095-C delay mean for 1040 filings?

By Helen Karakoudas | ACA Education Director, Integrity Data
December 30, 2015
[with February 24, 2016 update]

News from the IRS this week about the 60-day extension of the Form 1095-C production deadline is raising a particular concern among businesses that we work with – one question, asked several ways:

  • “What does a delay in delivering this form mean for our employees?”
  • “What happens when employees want to file their individual tax returns sooner than they get a 1095-C from us?”
  • “What can we tell employees about how this change in delivery of their 1095-C form will relate to their 1040 filing for 2015?”

The IRS covered this concern in a follow-up to the initial notice of the deadline extensions:

1095-C effect on 1040_Integrity Data ACA Compliance“Individual taxpayers will generally not be affected by this extension and should file their tax returns as they normally would.

“However, due to these extensions, some individual taxpayers may not receive a Form 1095-B or Form 1095-C by the time they are ready to file their 2015 tax return. While the information on these forms may assist in preparing a return, they are not required. Like last year, taxpayers can prepare and file their returns using other information about their health insurance. Individuals do not have to wait for their Form 1095-B or 1095-C in order to file.”

The specific answer we are guiding our clients to is that for the third question in the IRS’s ACA Q&A for individuals:

Must I wait to file until I receive these forms?

“If you are expecting to receive a Form 1095-A, you should wait to file your 2015 income tax return until you receive that form. However, it is not necessary to wait for Forms 1095-B or 1095-C in order to file.

“Some taxpayers may not receive a Form 1095-B or Form 1095-C by the time they are ready to file their 2015 tax return. While the information on these forms may assist in preparing a return, they are not required. Like last year, taxpayers can prepare and file their returns using other information about their health insurance. You should not attach any of these forms to your tax return.”

In this same Q&A, you can find other valuable information for educating those employees who do get a 1095-C form in time to file their individual tax returns:

What to do with a 1095-C?

“Form 1095-C provides information about the health coverage offered by your employer and, in some cases, about whether you enrolled in this coverage.

“Use Form 1095-C to help determine your eligibility for the premium tax credit.

  • If you enrolled in a health plan in the Marketplace, you may need the information in Part II of Form 1095-C to help determine your eligibility for the premium tax credit.
  • If you did not enroll in a health plan in the Marketplace, the information in Part II of your Form 1095-C is not relevant to you.

“Use Form 1095-C for information on whether you or any family members enrolled in certain kinds of coverage offered by your employer (sometimes referred to as “self-insured coverage”).

  • If Form 1095-C shows coverage for you and everyone in your family for the entire year, check the full-year coverage box on your tax return. 
  • If there are months when you or your family members did not have coverage, determine if you qualify for an exemption or must make an individual shared responsibility payment.

“Do not attach Form 1095-C to your tax return – keep it with your tax records.”

We recommend bookmarking and sharing the IRS page where these answers can be found:

Questions and Answers about Health Care Information Forms for Individuals (Forms 1095-A, 1095-B, and 1095-C)

Additional information made available February 24, 2016: In this afternoon’s post to its Health Care Tax Tips series, the IRS added Tax Tip 2016-23, titled Here’s What You Need to Do with Your Form 1095-C. We recommend sharing this link as well.

 

2017-01-08T13:22:43+00:00 December 30th, 2015|ACA Tracking, Reporting Compliance, General Payroll and HR, Microsoft Dynamics, Microsoft Dynamics GP, Microsoft Dynamics SL, Payroll User Group, Payroll and HR Software|0 Comments

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