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ACA Forms Furnishing Requirements Update
December 31, 2024
At A Glance
- President Biden signed the Paperwork Burden Reduction Act (PBRA) and the Employer Reporting Improvement Act (ERIA) on December 23, 2024.
- The PBRA allows employers to not furnish 1095-C and 1095-B forms to individuals unless requested by the individual. The federal rule does not necessarily apply to state requirements to issue forms 1095-C and 1095-B.
- The ERIA permit employers 90 days to respond to IRS 226-J letters and to use birthday in lieu of Social Security Number on forms 1095-C and 1095-B.
- All items are effective for tax year 2024.
The Paperwork Burden Reduction Act HR 3797
Under the PBRA, employers aren’t required to furnish form 1095-C or 1095-B beginning with tax year 2024. This is contingent upon the employer providing notice to individuals of their right to request the form under the Employer Reporting Improvement Act, discussed below. The form may be provided if requested, and the form may be provided electronically by the later of:
- January 31, or
- 30 days after the request.
Employer Reporting Improvement Act
The ERIA allows employers to use an individual's date of birth in lieu of their social security or tax ID number on forms 1095-C and 1095-B. This is effective for returns due after December 31, 2024.
The ERIA permits employers to electronically deliver health insurance coverage statements to an individual if the individual previously consented to electronic delivery, unless the individual revokes the consent in writing. This is effective for statements due after December 31, 2024.
The IRS will issue a 226-J Letter notifying Applicable Large Employers (ALE) they may be liable for the Employer Shared Responsibility Payment (ERSP) based on information on forms 1094-C and 1095-C and the individual’s tax return. Under the ERIA, the timeframe to respond to the letter is expanded from 30 to 90 days. The ERIA also clarifies there’s a six-year statute of limitations on collecting employer mandate penalties (previously no statute of limitations existed).
Next Steps
For the 2024 tax year, employers can elect not to send forms 1095-c or 1095-b, however proper notice of this change must be given to employees. This new flexibility only applies to the federal furnishing requirements. Employers subject to state reporting and furnishing requirements should continue to plan on furnishing required forms unless state agency changes are announced.
Thank you for choosing Paylocity as your Payroll Tax and HCM partner. This information is provided as a courtesy, may change, and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney, or Advisor.
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