IRS requires applicable large employees’ group health coverage information to enforce the affordable care act and individual mandates. ALE provides this information on 1094-C and 1095-C forms. Filing these forms correctly is important for ALE. In case of providing incorrect information, they may be subjected to penalties. Here are some common errors that ALE can make while filling the form:
Common ACA Reporting Mistakes
- Failure in entering a safe harbor code in line 16 of Form 1095-C
- In Part III, Column (a) of Form 1094-C, incorrectly indicated failure to offer coverage to all full-time employees.
- At Form 1094-C, Part II, Line 22 and Part III, column (e), ALE’s mostly failure to indicate transitional relief.
- Self-insured plan failure in reporting taxpayer identification numbers of all covered individuals.
- ALE’s may fail to file and furnish ACA reporting forms on time
- Failure in completing any or both of Forms 1094-C and 1095-C
How to Correct ACA Reporting Mistakes
Once you've found out that there is an error in your ACA reporting, read the instructions on the form again. Here are some instructions to follow for correcting your ACA reporting form.
Form 1094-C
- If there is an error in Authoritative Transmittal: each applicable large employer subject to the ACA employer mandate has to file a single Authoritative Transmittal. It should be filed on line 19, of Form 19-C part I. You need to correct Authoritative Transmittal only. IRS doesn’t require employers to file a return correction if the Form 1094-C is not Authoritative Transmittal.
- How to correct such mistakes? File a 1094-C form correctly and enter an "X" in the "CORRECTED" checkbox.
- If it is the only error, you don't have to file other documents.
Form 1095-C
- If the error is only due to an incorrect dollar amount on line 15, you may not need to correct it. Such errors are among safe harbor for which there is no penalty. The error will lie in the safe harbor if the error is not more than $100 of the correct amount. But an employee may elect that this harbor amount doesn't apply to him. In such situations, the employer needs to correct this error.
- How to complete the corrected Form 1095-C? File a 1095-C form correctly and enter an "X" in the "CORRECTED" checkbox. Sometimes, you may find out the error after sending the form to the employee but not the IRS. So, you don't have to enter "X" in the "CORRECTED" checkbox because the IRS hasn't received an incorrect form before. Instead, it's better to write "CORRECTED" on the new 1095-C form.
- Do employers have to file Form 1094-C with corrected Form 1095-C? Yes, but if there is no error in 1094-C, you don't need to mark the "CORRECTED" checkbox on it.
- Is there any need for sending the corrected form to the employee? Yes if the employer sent an original 1095-C to the employee, you have to send a copy of the updated form too.
Electronic filing
For filing more than 250 information returns, you need to do electronic filing. Electronic filing applies separately to original and corrected returns. There is a hardship waiver process described in IRS instructions. IRS encourages electronic filing of ACA reporting forms.
