The IRS issued key extensions to looming 2016 information reporting deadlines for applicable large employers. This relief applies only to the deadlines for reporting the coverage that employers offered in 2015:

  • The deadline for providing employee statements is extended to March 31, 2016 (from February 1, 2016).
  • The deadline for filing 1094-Cs and 1095-Cs with the IRS is extended to May 31, 2016 (June 30, 2016, if filing electronically) (from February 29, 2016 for paper filings and March 31, 2016 for electronic returns).

While the IRS encourages employers to complete reporting as soon as possible, it recognizes that some filers may need more time to do this for the first year of reporting.  Employers will not be able to request an automatic or permissive extension of time beyond these extended deadlines. This means that employers could incur a penalty if unable to provide employee statements by March 31, or to file returns with the IRS by May 31 (June 30, if e-filing). However, employers will still have an opportunity to demonstrate reasonable cause for reduced or waived reporting penalties for incomplete or inaccurate filings.  No penalty relief is available if there is a failure to timely provide an information return or to furnish a statement.

The key to avoiding penalties is to make a good faith effort and provide returns or statements by the applicable deadlines (with extensions), even if incomplete.

These deadline extensions could impact employees who need coverage information to file their income tax returns. For example, an employee enrolled in an individual policy at the Marketplace, with the potential for subsidized coverage, needs the 1095-C to confirm if their employer offered them affordable minimum essential coverage. In light of this, the IRS states that individuals who file their 2015 income tax returns based on information that they received from their employer or coverage provider do not need to file amended returns or take other action upon receipt of their 1095-C (and/or 1095-B).