Do You Have to File a 1095-C?
As a business owner, you’re likely familiar with the annual tax-related tasks that come with running a company. One of the most important tasks is filing tax forms, and one of the most critical forms is the 1095-C. But do you really need to file it?
What is a 1095-C?
A 1095-C is an annual information return filed by applicable large employers (ALEs) to report the healthcare coverage they provided to their employees and their spouses. The 1095-C form is a key part of the Affordable Care Act (ACA), also known as Obamacare, and is used to verify that employees have been offered health insurance coverage.
Who is Required to File a 1095-C?
Applicable large employers (ALEs) are required to file Form 1095-C if they have:
- 50 or more full-time employees (at any point during the calendar year)
- A combined employee count of at least 100 full-time employees plus the number of full-time equivalents (FTEs) for the prior tax year.
- Offered health coverage to its employees and their dependents during the calendar year.
Key Points to Note:
- ALEs with fewer than 50 full-time employees are not required to file Form 1095-C.
- Businesses that are exempt from the ACA, such as churches and certain non-profit organizations, do not need to file Form 1095-C.
When to File a 1095-C?
The deadline for filing Form 1095-C is typically January 31st of each year, although the deadline can vary depending on your business’s specific circumstances. It’s essential to file the form as soon as possible to avoid penalties and ensure compliance with the ACA.
How to File a 1095-C?
There are several ways to file a 1095-C, including:
- Filing online: The IRS offers an online filing system, called the AFFORDABLE CARE ACT (ACA) INFORMATION RETURN (AIR) system, which can be accessed through the IRS website.
- Paper filing: You can file on paper using Form 1095-C and mail it to the IRS.
- Hiring a tax professional: You can hire a tax professional or accountant to file the form for you.
Penalties for Late or Incorrect Filing:
Failing to file Form 1095-C can result in significant penalties, which can range from $100 to $2,500 per employee, depending on the circumstances. Additionally, you may face additional penalties for incorrect or incomplete filing.
What Information is Required on the 1095-C?
The 1095-C form requires the following information:
- Employer information: Your business’s name, address, and employer identification number (EIN).
- Employee data: The names, addresses, and EINs of your employees and their dependents.
- Health coverage information: The type and duration of health coverage offered to your employees.
- Codes: You’ll need to report the months of health coverage using a series of codes outlined in the IRS instructions.
What Happens if You Don’t File a 1095-C?
If you don’t file a 1095-C, you may face penalties, fines, and other consequences, including:
- Delays in processing tax payments and refunds
- Potential loss of tax-exempt status
- Legal action and fines
Conclusion:
Filing a 1095-C is a critical step in compliance with the Affordable Care Act. As a business owner, it’s essential to understand who is required to file, what information is needed, and the deadlines and penalties for non-compliance. By taking the time to file a accurate and complete 1095-C, you can ensure that your business is in compliance with the ACA and avoid potential penalties and fines.
Additional Resources:
- IRS Form 1095-C Instructions: https://www.irs.gov/forms-pubs/about-form-1095-c
- IRS Publication 517: https://www.irs.gov/pub/irs-pdf/p517.pdf
- Affordable Care Act (ACA) Information Return (AIR) System: https://www.irs.gov/affordable-care-act/aca-information-return-air-system
I hope this article helps you understand the importance of filing a 1095-C and the potential consequences of non-compliance.