Affordable Care Act (ACA) reporting under Section 6055 and Section 6056 for the 2021 calendar year is due in early 2022. Specifically, reporting entities must:
- Furnish statements to individuals by Jan. 31, 2022; and
- File returns with the IRS by Feb. 28, 2022 (or March 31, 2022, if filing electronically).
Penalties may apply for reporting entities that fail to file and furnish required returns and statements by the deadline.
A proposed rule issued on Nov. 22, 2021, would extend the annual furnishing deadlines under both Sections 6055 and 6056 for an additional 30 days. However, this rule is in proposed form and has not been finalized. As a result, the general furnishing deadline (Jan. 31) continues to apply. In either case, reporting entities are generally encouraged to furnish statements to individuals as soon as they are able.
- Furnishing Deadline
A proposal would extend the deadline for furnishing 2021 statements to individuals. However, the proposal has not been finalized. The deadline for filing with the IRS remains unchanged.
- Furnishing under Section 6055
The proposed rule would also provide an alternative method for furnishing statements to individuals under Section 6055. The proposal would generally require statements to be provided upon request only.
The IRS generally encourages reporting entities to furnish statements as soon as they are able.
Although penalty relief has been provided in prior years for reporting entities that make good faith efforts to comply with the reporting requirements, this penalty relief is not available for reporting for tax year 2021 and subsequent years. This good faith relief was intended to be transitional to accommodate public concerns with implementing new reporting requirements under the ACA. These reporting requirements have now been in place for six years, and the IRS has determined that transitional relief is no longer appropriate. Therefore, the IRS has discontinued the transitional good faith relief after tax year 2020.
Read the full compliance bulletin linked below for more information.
If you have questions related to this update, please contact your North Risk Partners advisor. Don’t have an advisor? No problem. We’ll help you find one.
This regulatory update is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.
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