It is true that businesses that are self-insured must report a Social Security Number for every covered dependent they identify under Part III of IRS Form 1095-C. A penalty could be assessed for failure to supply the TIN (TIN stands for Taxpayer Identification Number which refers to the SSN)
However, Notice 2015-68, states as follows, “Specifically, the IRS will not impose penalties under §§ 6721 and 6722 on reporting entities that can show that they have made good faith efforts to comply with the information reporting requirements. This relief applies to incorrect or incomplete information, including TINs or dates of birth, reported on a return or statement. The preamble to the § 6055 regulations also notes the general rule that, under § 6724 and the related regulations, the §§ 6721 and 6722 penalties may be waived if a failure is due to reasonable cause, that is, the reporting entity demonstrates that it acted in a responsible manner and the failure is due to significant mitigating factors or events beyond the reporting entity’s control. Information reporting under § 6055 is subject to the penalty provisions of §§ 6721 and 6722 for failure to file a correct information return or to furnish a correct statement. See § 1.6055–1(h). Penalties may be waived under § 6724(a) if the failure is due to reasonable cause and not willful neglect; that is, if a reporting entity demonstrates that it acted in a responsible manner and that the failure is due to significant mitigating factors or events beyond the reporting entity’s control. See § 301.6724–1(a)(1). Under § 301.6724–1(e), a reporting entity acts in a responsible manner in soliciting a TIN if the reporting entity makes (1) an initial solicitation when an account is opened or a relationship is established, (2) a first annual solicitation by December 31 of the year the account is opened (or January 31 if the account is opened in December), and (3) a second annual solicitation by December 31 of the following year. Additionally, a reporting entity is not required to solicit a TIN from an individual whose coverage is terminated.”
The 2015 and beyond e-filing to the IRS has accepted a birth date if a SSN cannot be obtained. This does not cause an error when you e-file.
Remember, you must comply and keep on file your attempts to gain the SSN from the employee as required above.
Questions / Resources
If you have questions or comments please email Support@integrity-data.com.
If you would like to search for information and resources for Integrity Data products check out the following sites:
- Knowledge Base: https://www.integrity-data.com/hrp/knowledge-base/
- Videos: https://www.integrity-data.com/hrp/videos/
Last Review: 8/12/2022 – Revision: 1.1
ACA Compliance Solution
Keywords: Dependent, SSN, TIN