Do I Have to File a 1095-C?
The 1095-C form is an important tax document that employers must provide to employees, but not all employers are required to file this form. In this article, we’ll explore the requirements for filing a 1095-C, who needs to file it, and what it means for your tax obligations.
Do I Have to File a 1095-C?
The short answer is: not necessarily. The 1095-C is a required document, but not all employers need to file it with the Internal Revenue Service (IRS). If your business is exempt from filing a 1095-C, you don’t have to.
But before we dive into the exempt employers, let’s understand the purpose of the 1095-C form.
What is the 1095-C Form?
The 1095-C is an annual filing requirement for employers who offer employer-sponsored health coverage to their employees. This form reports the lowest cost employer-sponsored plan (LEAP) and the 90th percentile of the total cost to the employer. The 1095-C is used to determine whether your business is subject to the Affordable Care Act (ACA)’s employer mandate.
Who Must File a 1095-C?
You must file a 1095-C if you are considered an applicable large employer, which is defined as:
- Employers with 50 or more full-time equivalent employees (FTEs);
- Employers with 100 or more FTEs, regardless of whether they offer health insurance or not; or
- Employers who are part of a controlled group, i.e., multiple related companies.
Even if you’re not required to file a 1095-C, you might still need to provide the form to your employees. If you have 50 or more FTEs, you must provide the 1095-C to your employees and copies to the IRS.
Exempt Employers
Some employers are exempt from filing a 1095-C, regardless of the number of employees. These include:
- Small employers (fewer than 50 FTEs);
- Clergy or ministers (specifically exempt by section 1327 of the Tax Code);
- Government agencies, including federal, state, and local governments;
- Non-profit organizations, including tax-exempt organizations under 501(c)(3) or 501(c)(4);
- Employee stock ownership plans (ESOPs);
When to File a 1095-C?
The 1095-C is typically due to the IRS by February 28, 2023, for paper filings and March 31, 2023, for electronic filings. Late filing can result in penalties and fines. Make sure to file accurately and on time to avoid any additional costs and hassle.
Table: 1095-C Filing Requirements
| Employer Characteristics | Required to File 1095-C? |
|---|---|
| Applicable Large Employer (50+ FTEs) | Yes |
| Small Employer (fewer than 50 FTEs) | No |
| Government Agencies | No |
| Non-Profit Organizations | No |
| Employee Stock Ownership Plans (ESOPs) | No |
Penalties for Late or Inaccurate Filing
Failing to file or incorrectly filing a 1095-C can result in penalties and fines from the IRS. Here are some significant penalties to consider:
- The per-employee penalty is $2,080.50 per employee, and the maximum penalty is $2,139,500.
- The maximum annual penalty for not providing coverage is 3% of the employer’s total premium
To avoid these penalties, make sure to:
- File your 1095-C accurately and on time
- Provide the 1095-C to your employees
- Maintain accurate records
In conclusion, while not all employers need to file a 1095-C, those who are required to do so must understand the requirements and comply with the deadlines. Be aware of the penalties and fines for late or inaccurate filing, and take the necessary steps to ensure compliance.