ACA 1094/1095 Series Filing Updates that Affect Small Businesses
Robyn Carlini • September 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 B and C 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.
Navigating reporting with multiple different types of employee working hours can be quite challenging. Since the enactment of the Affordable Care Act, questions and debates have arisen about the impact of this law on third-party staffing arrangements. Many companies offer temporary and part-time employees lower-tiered benefits, if any. If you have employees working a variety …
Stay ahead of evolving regulations with our on-demand webinar, Navigating the Latest ACA Changes & Compliance Trends. Hosted by our Chief Legal Counsel, Stacy Barrow, J.D., this session provides expert insights into the most recent Affordable Care Act updates and what they mean for your organization. Learn how to stay compliant, avoid costly penalties, and prepare for what’s ahead in ACA reporting and enforcement.
There is some potential legislation pending presidential approval that could affect the Affordable Care Act (ACA) employer reporting requirements. It’s unclear if these bills will become law, but as we are amid filing season, wanted to share a summary of what we know.
