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ACA 1094/1095 Series Filing Updates that Affect Small Businesses

Robyn Carlini • Sep 18, 2023
As the tax year 2024 approaches, small businesses are gearing up to address critical updates laid out by the IRS that have the potential to significantly reshape their reporting landscape. 

Mandatory Electronic Filing

The IRS ushered in a new regulation of return-filing procedures with the finalization of rule TD 9972 on February 23, 2023. This rule, designed to modernize processes and reduce reliance on paper filings, marks a considerable shift. Starting in 2024, it's crucial for small businesses to be attuned to the reduced threshold for mandatory electronic reporting. Beginning in 2024, encompassing the 2023 reporting year, employers who are filing a total of 10 or more returns are obligated to electronically submit their Forms 1094-C and 1095-C.

Small employers that have historically depended on sending their B forms via mail will also experience the effects of this new regulation. Specifically, this pertains to businesses that operate as self-insured small employers, typically with fewer than 50 employees. In the past, these employers often handled the reporting themselves due to the relative simplicity of the -B forms compared to the more complex -C forms intended for Applicable Large Employers (ALEs). Moreover, they were allowed to file on paper if they were submitting fewer than 250 returns. This new procedure has a significant change for small employers who now have to adopt the IRS AIRS system for electronic filing of these forms. This process is a multi-step endeavor, with the initial stage involving the application for an IRS transmitter control code. For a more streamlined approach, opting for an external e-filing software solution proves to be a simpler alternative.

Aggregate Groups

In addition to the revised threshold, small businesses should be aware of the new requirement to aggregate the number of different returns they file when determining whether they meet the 10-return threshold. This change means that the combined number of forms across various categories, such as Forms W-2, 1099, 1095, income tax returns, employment tax returns, and excise tax returns, will be taken into account. This shift could impact more small businesses, making electronic filing the norm for most.

Review of A Forms and B Forms

In Conclusion


For small businesses, there's no denying the importance of prioritizing ACA reporting. An important part of this process is to opt for an ACA vendor that offers comprehensive support for filing both the 1094 and 1095 A and B forms.


About SyncStream

SyncStream maintains a tenured, knowledgeable staff who continually monitors changes to the employer mandate regulations and updates solutions as laws evolve. By outsourcing your ACA compliance to a reputable service like SyncStream's Total ACA, you can simplify the reporting process, reduce the risk of errors, file for the B forms and C forms, and ultimately save time and money. Focus on running your business while experts take care of your ACA reporting needs.



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