State ACA furnishing deadlines looming for employers in states that have not followed IRS extension

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December 9, 2021
2021-2216

Despite the IRS's recent extension of the federal deadline for furnishing Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, to employees, some states with ACA reporting requirements have not extended their deadlines for furnishing these forms. While New Jersey and the District of Columbia have extended their deadlines, the deadline for furnishing Forms 1095-C remains January 31, 2022, for some states with ACA reporting requirements.

IRS extension

The IRS extended the furnishing deadline to March 2, 2022, through proposed regulations (REG-109128-21) that would permanently extend the Affordable Care Act (ACA) reporting deadline for applicable large employers to furnish Form 1095-C to employees to 30 days after January 31. Taxpayers may rely on these proposed regulations for calendar years beginning after December 31, 2020 (see Tax Alert 2021-2165).

State requirements

The District of Columbia, New Jersey, Vermont, California and Rhode Island have enacted some form of an individual mandate. Each jurisdiction leverages the federal Form 1095-C for purposes of administering its individual mandate requirement. Massachusetts, which has had an individual mandate since 2006, uses its own reporting forms.

The following chart shows the deadlines for the IRS and all states with an individual mandate as of December 8, 2021. The furnishment date is the date Form 1095-C needs to be postmarked/mailed to employees. The employer penalty may be assessed if Forms 1095-C are not mailed to employees by the deadline. The filing date is the date Form 1094-C and 1095-C must be submitted to the state filing agency. The employer penalty may be assessed if Forms 1094-C and 1095-C are not filed with the state filing agency by the deadline.

Jurisdiction	Furnishment date	Late furnishment penalty	Filing date	Late filing penalty	Comments
IRS	March 2, 2022	$280 per employee; lower rates may apply	March 31, 2022	$280 per employee; lower rates may apply	The $280 penalty decreases to $50 if Form 1095-C is filed/furnished within 30 days of the due date or to $100 if filed/furnished before August 1, 2022.
California	January 31, 2022	None	March 31, 2022 (to the CA Franchise Tax Board)	$50	No penalty applies if the return is filed on or before May 31, 2022.
District of Columbia	March 2, 2022	None	April 30, 2022 (to the DC Office of Tax and Revenue)	None	The furnishing deadline follows the IRS deadline; the filing deadline is 30 days after IRS due date, including extensions.
New Jersey	March 2, 2022	None	March 31, 2022 (to the NJ Dept. of the Treasury)	None
Rhode Island	January 31, 2022	Penalties reviewed and assessed on a case-by-case basis	March 31, 2022 (to the RI Div. of Taxation)	Penalties reviewed and assessed on a case-by-case basis	A furnishing extension for 2021 has not been announced as of December 3, 2021.
Vermont	N/A	N/A	N/A	N/A	Furnishing Form 1095-C per IRS requirements satisfies Vermont reporting; no additional filing is required.
Massachu- setts	January 31, 2022 (Form 1099-HC to employees)	$50 per individual	March 31, 2022 (Form 1099-HC to the MA Dept. of Revenue)	None	State Form 1099-HC is used instead of IRS Forms 1094-C and 1095-C. Insurance carriers typically furnish Form 1099-HC to individuals enrolled in coverage and transmit those forms to the state.

Implications

While the IRS has extended the deadline to furnish Forms 1095-C to individuals, some states still have a January 31 deadline. Employers producing these forms for individuals in states with the January 31 deadline should make sure the forms are post-marked by the correct date.

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Contact Information
For additional information concerning this Alert, please contact:

Workforce Tax Services/Affordable Care Act
• Lori Maite (lori.maite@ey.com)
• Rebecca Truelove (rebecca.truelove@ey.com)
• Ron Krupa (Ron.Krupa@ey.com)
• Belinda A. Sharp (Belinda.Sharp@ey.com)