Pension & Benefits News IRS extends filing deadlines, penalty relief for health coverage reporting
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Thursday, October 15, 2020

IRS extends filing deadlines, penalty relief for health coverage reporting

By Pension and Benefits Editorial Staff

Health insurance providers (including employers and health insurance companies) now have until March 2, 2021, to provide individuals with Forms 1095-B, Health Coverage, or Forms 1095-C, Employer-Provided Health Insurance Offer and Coverage. This is a 30-day extension from the original due date of January 31, 2021.

Note that the due dates for employers and insurers to file 2020 information returns with the IRS are not extended.

Employers and providers must furnish Forms 1095-B and 1095-C to employees or covered individuals regarding the health care coverage offered to them. The forms may help recipients determine whether they may claim the premium tax credit on their income tax returns. However, taxpayers do not have to file these forms with their returns. They may prepare and file their returns before they receive their Forms 1095-B or 1095-C.

This extension of the filing deadline means that the IRS will not respond to any requests for 30-day extensions that employers and providers have already filed.

Furnishing Form 1095-B in 2020. Because the individual shared responsibility payment is zero in 2020, an individual does not need the information on Form 1095-B to compute their federal tax liability or file an income tax return with the IRS. For 2020, the IRS will not assess a penalty under Code Sec. 6722 against reporting entities for failing to furnish a Form 1095-B to responsible individuals in cases where the following two conditions are met:

  1. The reporting entity has posted a notice prominently on its website stating that responsible individuals may receive a copy of their 2020 Form 1095-B upon request, accompanied by an email address and a physical address to which a request may be sent, as well as a telephone number that responsible individuals can use to contact the reporting entity with any questions; and
  2. The reporting entity must furnish a 2020 Form 1095-B to any responsible individual upon request within 30 days of the date the request is received.

This relief does not apply to self-insured plans furnishing Form 1095-C to full-time employees, and it does not affect requirements to file the 2020 forms with the IRS.

Penalty relief. The IRS also extended transition relief from late-filing penalties for reporting entities that can show they made good faith efforts to comply with reporting requirements for both individual statements and information returns that have missing or inaccurate taxpayer identification numbers and dates of birth, as well as other required information. In determining good faith, the IRS will take into account whether an employer or other coverage provider made reasonable efforts to prepare for reporting and providing the required information. Reporting entities that fail to file an information return or furnish a statement by the extended due dates are not eligible for relief. As this good-faith relief was intended to be transitional relief, this is the last year the Treasury Department and the IRS intend to provide this relief.

Request for comments. The IRS has requested comments as to whether an extension of the due date for furnishing statements to individuals under Code Sec. 6056, and an extension of good-faith reporting relief under Code Sec. 6056, would be necessary for future years and, if so, why. Taxpayers and reporting entities are requested to submit comments electronically via the Federal eRulemaking Portal at www.regulations.gov. Alternatively, taxpayers and reporting entities may mail comments to: Internal Revenue Service Attn: CC:PA:LPD:PR (Notice 2020-76) Room 5203 P.O. Box 7604 Ben Franklin Station Washington, D.C. 20044. Comments must be submitted by February 1, 2021.

SOURCE: Notice 2020-76, I.R.B. 2020-43, October 19, 2020.

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