The Internal Revenue Service requires all applicable large employers to disclose whether or not they have offered health insurance to their employees. It also requires Health insurance information on whether or not their employees have accepted the coverage.
The regulatory requirements are In accordance with the requirements of the Affordable Care Act.
So what is form 1094 c? In a nutshell, Form 1094-C is for transmitting information about health insurance provided by employers. This blog post will seek to address the common mistakes in completing Form 1094-C
Common Completion Mistakes on Form 1094-C
Let’s look at common reporting mistakes that can result in a penalty letter.
Leaving Some Boxes Unchecked
Whether you fill out Form 1094-C or use a payroll company or other service, please read them carefully and fill in all the necessary information! We have had clients fined because they forgot to check one box on Form 1094-C that said they offered the minimum essential coverage for all 12 months of the tax year. That’s all it takes to trigger a penalty letter. How do you fix these kinds of mistakes? Fill out a 1094-C form correctly and mark the “CORRECTED” box with an “X.”
Not Making A Copy Of The Forms You Fill Out
Even if you think you’ve done everything right, you never know if the IRS will send a penalty letter to your company. Keep a copy of what you send to the IRS so you can make changes if you need to or quickly answer a notice about a penalty.
Missing Deadlines
What is the form 1094-C filing deadline? The IRS will sometimes give you more time to pay, but don’t assume they always will. Watch your due dates! The standard due dates are as follows:
- January 31: Last day for employees to get Form 1095-C
- February 28: organizations must send paper Forms 1095-C and 1094-C to the IRS by February 28 annually.
- March 31 is the last day to file electronically with the IRS. You must use the electronic filing system if you submit more than 250 forms. Electronic filing applies for both the initial and amended tax returns. The IRS provides detailed guidelines for applying for a hardship waiver for those experiencing extreme financial hardship. The IRS prefers the electronic submission of ACA reports.
Code Mistakes
Whether or not your business is liable to fines depends on the codes you enter on Form 1094-C and the months in which those penalties apply. The number is relatively high, albeit there are some restrictions on some of them. To give only one illustration:
- If you made an offer, type it into Line 14.
- The minimum cost for self-only coverage appears on Line 15.
- To avoid a fine for that month, please explain why on Line 16.
- Line 14’s code could prevent you from finishing Line 15.
Authoritative Transmittal Errors
If there is a mistake in the Authoritative Transmittal, each large employer who follows the employer mandate of the ACA must file a single Authoritative Transmittal.
The transmittal must appear on Form 19-C, line 19, part I.
Authoritative Transmittal only needs amendment. If Form 1094-C is not Authoritative Transmittal, the IRS does not require employers to file a return correction.
Employers should send in a new 1094-C (Authoritative Transmittal) if any of the following mistakes come up on the original form:
- Name of the ALE or its EIN
- A summary of Forms 1095-C filled out by or for the ALE
- Information about ALE groups as a whole
- Proof that you are eligible
- Minimum essential coverage Indicator
- Indicator for Section 4098H Transition Relief
- the number of full-time workers
- A whole group indicator
The penalty imposed by the IRS for failing to give an accurate employee statement is $100 per inaccurate statement. The penalties for a given year cannot exceed $1,500,000.
Additional penalties may apply if a violation of the need to provide an employee statement is deliberate. The IRS website contains further information.