ACA TY23: A Timely Look at ACA Deadline Penalties

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Nov 30, 2023

As IRS filing deadlines approach in the New Year, BENEFITSCAPE takes a look at the hefty penalties for employers missing TY23 ACA deadlines. And we also issue three warnings about some misleading ACA information online.

WARNING 1: Some online AI-generated guides to ACA reporting & compliance confuse IRS penalties for late or incorrectly furnished filings [IR Codes §6721 & §6722] with IRS penalties for non-compliant Offers of Coverage [IR Code 4980H]. In this authored post we deal with the former: late or incorrectly furnished filings.

WARNING 2: Some ACA guides also confuse penalty amounts for TY23 [filing in 2024] with amounts posted by the IRS for late filing of TY24 returns. In this post we deal with penalties liable for late ACA TY23 returns [filing in 2024].

THE KEY IRS TY23 ACA DEADLINES ARE AS FOLLOWS:

» March 1, 2024: Deadline to furnish Forms 1095-C to individual eligible employees. [This date takes in account that 2024 is a leap year.]

» April 1, 2024: Deadline to e-file Forms 1095-C and related ACA forms to the IRS. [This date takes into account March 31 falls on a Sunday in 2024.]

WARNING 3: Some ACA guides give the deadline for paper filing of Forms 1094-C. For TY23 [filing in 2024] the IRS requires all ALEs [absent very unusual circumstances] to e-file Forms 1095-C via the IRSAIR system.

SO HERE ARE THE CORRECT TY23 FINES FOR MISSING 2024 DEADLINES

< 30 DAYS LATE: IRS PENALTY = $60 PER RETURN with a maximum penalty of $630,500 per ALE.

> 30 DAYS LATE BUT BEFORE AUG 1: IRS PENALTY = $110 PER RETURN; with a maximum penalty of $1,766,000 per ALE.

AFTER AUG 1: IRS PENALTY = $290 PER RETURN; with a maximum penalty of $3,532,500 per ALE.

IRS PENALTY = $580 PER RETURN with no limitation on maximum if the IRS determines failure to file is intentional disregard.

Net, net, if you aren’t already, today is a very good day to ahead of your company’s ACA compliance!

If you have any questions about these dealines and penalties or any other aspect of the ACA process, please contact BENEFITSCAPE [the leading ACA specialist for employers on all major HCMs/ACA modules] at +1-508-655-3307 or info@benefitscape.com.