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Limited Penalty Relief for ERs Correcting Information Reporting Errors

Apr 21, 2016

HR360, Inc.
April 18, 2016

Relief Applies to Calendar Year 2015 Reporting

Employers that comply with the extended information reporting deadlines and must later correct errors on their filed forms will not be subject to penalties if they can demonstrate they made a good faith effort to comply with the information reporting requirements for 2015. This short-term relief from reporting penalties only applies to returns and statements filed and furnished in 2016 to report offers of coverage in 2015.

Information Reporting Deadlines
Applicable large employers—generally those with 50 or more full-time employees, including full-time equivalent employees (FTEs)—and other parties that provide minimum essential health coverage were required to furnish Forms 1095-B and 1095-C to employees/responsible individuals by March 31, 2016. In addition, Forms 1094-B, 1095-B, 1094-C, and 1095-C are required to be filed with the IRS by May 31, 2016 (if not filing electronically) or June 30, 2016 (if filing electronically).

Short-Term Penalty Relief
Specifically, the IRS will not impose penalties under Internal Revenue Code sections 6721 and 6722 for incorrect or incomplete information reported on 2015 returns or statements that are filed and furnished in 2016 on reporting entities that can show that they have made good faith efforts to comply with the information reporting requirements.

No relief is provided in the case of reporting entities that cannot show a good faith effort to comply with the information reporting requirements or that fail to timely file an information return or furnish a statement. However, such employers may still qualify for penalty relief if the IRS determines that the standards for reasonable cause under Internal Revenue Code section 6724 are satisfied.

Be sure to visit our section on Information Reporting for more employer requirements.

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