Just when the stress of the rapidly approaching ACA reporting deadlines was becoming too much to bear, the IRS swooped in with some great news for employers everywhere.
In Notice 2016-4, the IRS significantly pushed back all of the original reporting deadlines. The new dates employers will need to know:
- March 31, 2016 – date by which employers are required to distribute forms to employees and covered individuals (original deadline Feb. 1)
- May 31, 2016 – deadline for firms to file paper forms with the IRS (original deadline Feb. 29), and
- June 30, 2016 – deadline firms with 250 more returns must file with the IRS.
Why the extra time? Treasury Senior Adviser Mark Iwry said: “It’s a limited extension to make the system work as smoothly as possible.”
What about those previous extensions?
One thing employers should keep in mind about this delay: The feds expect employers to have the reporting ready by the new deadlines. In fact, the IRS expects all firms to apply a “good-faith” standard to complying with these generous deadline extensions or face costly non-reporting penalties.
Plus, it looks the new timetable effectively cancels out the filing extensions the IRS had been offering.
If you remember, the IRS had previously stated that some employers may be eligible to get a 30 day reporting extension (and in limited situations even a 60-day break).
In order to take advantage of the extension, employers were directed by the feds to use Form 8809 (Application for Extension of Time to File Information Returns) and submit it by the reporting deadline.
Now, however, the agency said because the new deadlines are available to all filers and are more favorable than the available extensions, any such requests “will not be formally granted.”
4 keys steps
To help make sure you’ve dotted all i’s and crossed all t’s before the
deadlines roll around, here’s a four-step checklist, courtesy of employment attorney Penny C. Wofford:
1. Double-check that all full-time employees have been identified for ACA reporting purposes, paying close attention to special circumstances such as staffing, temporary, short-term employees, etc.
2. Make sure you’re using the best calculation method – the monthly measurement method or the look-back method – for your particular workforce.
3. Update all necessary plan documents and summary plan descriptions (SPDs) to reflect the measurement method your company uses to determine full-time status.
Try to include specific date ranges (for measurement and stability periods), waiting periods for new employees and detailed info on how to treat workers in special circumstances (e.g., employees shifted from part-time to full-time).
4. Select the appropriate safe harbor you’ll use for the ACA’s affordability calculation, from:
- W-2,
- rate of pay (monthly), or
- federal poverty line.
