Reminder for Electronic Filing Under ACA

As noted in the previous article, the 2023 instructions to the Forms 1094 and 1095 include information on the new electronic filing threshold for information returns required to be filed on or after January 1, 2024, which has been decreased to 10 or more returns (originally, the threshold was 250 or more returns). Specifically, the instructions provide the following clarifications and reminders:

• The requirement to file 10-or-more returns electronically applies in the aggregate. Thus, a reporting entity may be required to file fewer than 10 of the applicable Forms 1094 and 1095, but still have an electronic filing obligation based on other kinds of information returns they will be filing (e.g., Forms W-2 and 1099).
• The IRS may grant waivers to the electronic filing requirement upon request, but only in limited circumstances. The IRS still encourages electronic filing even if a reporting entity is filing fewer than 10 returns.
• Employers can use the AIR System to electronically file ACA information returns with the IRS.  This system is separate from the system used to file other information returns like Forms W-2.
• When filing forms electronically, the formatting set forth in the “XML Schemas” and “Business Rules” published on IRS.gov must be followed rather than the formatting directions in the instructions, which are intended to assist paper filers only.

Employer Action Items

Employers who are not currently set up for electronic filing should take steps to do so soon, whether on their own or through a third party.  Reporting entities that may be in a position to perform their own electronic reporting can review the IRS’ ACA Information Returns (AIR) Program webpage.

More Information

Read here for more information on the electronic filing process and the AIR System, as well as IRS Publications 5164 and 5165.

More Information

For questions regarding this Legislative Update or any other related compliance issues, please contact your Burnham Benefits Consultant or Burnham Benefits at 949‐833‐2983 or inquiries@burnhambenefits.com.

This Legislative Update was prepared by the Baldwin Regulatory Compliance Collaborative (the “BRCC”), a partnership of compliance professionals offering client support and compliance solutions for the benefit of the Baldwin Risk Partners organization, which includes: Jason Sheffield, BRP National Director of Compliance; Richard Asensio, Burnham Benefits Insurance Services; Nicole L. Fender, the Capital Group; Bill Freeman, AHT Insurance; Stephanie Hall, RBA/TBA; Caitlin Hillenbrand, AHT Insurance; Paul Van Brunt, Baldwin Krystyn Sherman Partners (BKS); and Natashia Wright, Insgroup.

Burnham Benefits and the BRCC do not engage in the practice of law and this publication should not be construed as the providing of legal advice or a legal opinion of any kind. The consulting advice we provide is intended solely to assist in assessing its compliance with applicable federal and state law requirements, and is based on our interpretation of federal guidance in effect as of the date of this publication. To the best of our knowledge, the information provided herein, and assumptions relied on, are reasonable and accurate as of the date of this publication. Furthermore, to ensure compliance with IRS Circular 230, any tax advice contained in this publication is not intended to be used, and cannot be used, for purposes of (i) avoiding penalties imposed under the United States Internal Revenue Code or (ii) promoting, marketing or recommending to another person any tax-related matter.