At this point, you’re likely preparing to send your transmittal for ACA reporting if you haven’t already, which means you may be anxious about any corrections you’ll need to perform. Generally, transmitting correction files are required to correct errors found on original filings, replacement filings, or other corrections filings. As a filer, you may discover corrections are needed via IRS notification, the reporting entity, or from a recipient of a 1095 form. Well, the IRS recently released an ACA Corrections Webinar to help provide guidance on this process, but it does not quite cover everything you may have been looking for. There is not a lot of new information or comprehensive instructions, but the webinar does break down the process clearly.
Key ACA Corrections TakeawaysHere are some of what the ACA Corrections Webinar, presented by the IRS, does cover:
- You can only correct 1095-B/C and Authoritative Transmittals. 1094-B and 1094-C (non-authoritative) are just cover sheets. Do not correct those.
- File corrections as soon as possible, but they may be filed after the due date. If filing after the due date, file as soon as possible.
- The instruction list of examples of correction types in the webinar is not exhaustive and these errors are not inconsequential. For instance, the IRS regulations provide that if TIN is not available, a date of birth may be entered on Form 1095-B or form 1095-C. One interpretation of the list would suggest that filers must have an SSN for 1095-C at the subscriber level, but can use a DOB for 1095-C covered individuals. This should be confirmed with the IRS since this ACA Corrections Webinar does not offer every scenario and many questions still remain.*
- Do not supply only the corrected information when correcting a record. This is true for both paper corrections and electronic corrections.
Main Penalty Takeaways
- Certain errors on information returns will not result in a penalty. For example, an inconsequential error or omission is not considered a failure to include correct information.
- Inconsequential errors: These types of errors do not prevent the IRS from processing, correlating required information with the affected individual’s tax return, or otherwise putting the return to its intended use.
- TIN errors and/or surname errors are never inconsequential.
- Wrong forms or wrong substitute forms are never inconsequential.
- No penalty relief for late filings
Important Deadline RemindersRemember, paper ACA returns are due to the IRS by May 31, 2016. Electronic ACA transmissions are due to the IRS by June 30, 2016. If you are still looking for help with your ACA reporting, we encourage you to get in touch with us. *Legal Disclaimer: The information provided in this document is for informational purposes only. By publishing this document, Sovos Compliance is providing information of a general nature which should not be construed by the reader as specific tax or legal advice or services. Sovos Compliance recommends that you engage a qualified professional before taking any action that affects your business.
About the Author
Sovos is a leader in global tax, compliance and business-to-government reporting software, safeguarding businesses from the burden and risk of compliance in thousands of tax jurisdictions around the world.More Content by Sovos -