IRS Finalizes ACA Furnishing Extension and 2022 Form Instructions

At A Glance

• On December 12, 2022, the IRS published an advance notice of the Affordable Care Act (ACA) final rulemaking which provides an automatic 30-day extension to furnish the 1095-B and 1095-C to individuals
• Employers have until March 2, 2023 to furnish these statements to individuals
• The IRS electronic filing deadline remains March 31, 2023
• On December 13, 2022, the IRS published the 2022 1095-C Instructions, the instructions do not contain any significant changes
• The Centers for Medicare and Medicaid Services (CMS) has provided updated resources for employers.
• Additionally, CMS has provided an FAQ for Insurance Agents and Brokers.

Final ACA Regulations

The final regulation follows proposed rules published on December 6, 2021, which provides an automatic extension of time for providers to furnish the 1095-B and 1095-C to individuals. Employers subject to the ACA employer shared responsibility mandate must furnish a completed 2022 Form 1095-C to employees no later than March 2, 2023.

Per the recently published 2022 1095-C instructions, employers who file information returns electronically to the IRS must file the 2022 Forms 1094 and 1095 by March 31, 2023. If filing paper forms, the deadline for the 2022 forms is February 28, 2023. No other significant changes are announced in the instructions.

It is important to note that this rule does not apply to state-specific health care reporting requirements.

“Good-Faith Relief” Expired

Traditionally, employers were able to rely on “good-faith relief” to potentially avoid IRS tax penalties for non-compliance. This relief allowed employers who reported incomplete or
incorrect information on their information returns to show they made a good-faith effort to file and furnish. The final regulation confirms that good-faith relief is no longer available.

Next Steps

Paylocity clients must finalize ACA form data by the end of business on 01/03/2023 to ensure all Company Administrators receive year-end forms timely.

Paylocity clients may also consider the following alternative options to allow extra time to finalize forms and avoid reprint fees:

• Go Paperless to avoid reprint fees of $100.00 per package plus +$20.00 minimum for delivery in case updates to original forms need to be made up until 2/15/23
• Packages include any quantity of forms in the same request (1 form, multiple forms, or all forms)
• Paperless setup.
• Prepare for a paperless year end.
• Contact a Paylocity Representative for assistance to regenerate forms after making necessary changes.

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.