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Is ACA employer reporting still required for 2017 tax year? Are you sure?

Ever since it was signed into law in 2010, the Affordable Care Act (ACA) has been the subject of much concern—and confusion—for employers. This past year has been no exception, due to a handful of attempts by GOP lawmakers to overhaul the controversial legislation.

At this time, however, the ACA remains the law of the land, and employers must prepare and report in January 2018 to stay in compliance with the law. In fact, due to stepped up efforts by the IRS to enforce the ACA and impose penalties on those who ignore it, annual 1095 information reporting holds even greater weight this year.

“We recently surveyed more than 200 business owners impacted by the ACA, and nearly half said they aren’t sure whether reporting will be required for this year,” says Susan Drenning, President of ComplyRight, a provider of expert resources and solutions to help businesses comply with employee-related laws. “I’d like to clear up the confusion: Not only do employers need to meet the reporting requirements as long as the law stays in effect, but they should also be aware of the stronger stance being taken by the IRS.”

Drenning is referring to the fact that the IRS recently announced that it will not waive Employer Shared Responsibility Payments (ESRP), nor will it accept 1040s from individual taxpayers that do not include the required health care coverage information from employers. This means affected employers must file 1095-C reporting forms and supply copies to employees or face a potentially frustrating and costly situation. If they ignore or delay their reporting requirements, they could experience pushback from upset employees, as well as significant penalties from the IRS.

“The IRS has been slow in taking action on ACA reporting violations and penalties, largely due to insufficient support systems,” says Drenning. “But now that these systems are in place, employers should expect vigorous enforcement.” Non-compliance with the ESRP and annual reporting requirements could bring in more than $200 billion in penalties over the next several years, according to Congressional Budget Office projections.

The ACA reporting requirements have the biggest impact on applicable large employers (ALEs)—businesses with 50 or more full-time or full-time equivalent employees. To stay on schedule and avoid IRS penalties, these businesses must meet the following tax-filing deadlines:

  • January 31, 2018 – mail employee copies
  • February 28, 2018 – IRS paper-filing deadline
  • April 2, 2018 – IRS e-filing deadline (mandatory for employers filing 250+ forms)

Drenning stresses the importance of timely preparation and reporting: “If you were one of the employers who held off gathering ACA reporting information while the ACA was being debated in Washington, D.C., it’s critical to act now. Otherwise, you may have to respond to concerned employees who can’t complete their 1040s—and could eventually face steep penalties from an IRS intent on enforcing the rules.”

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