Notice 2018-94 (Nov. 29, 2018)
Available at https://www.irs.gov/pub/irs-drop/n-18-94.pdf
The IRS has issued Notice 2018-94 to announce limited relief for information reporting on Forms 1094 and 1095 for the 2018 tax year, mirroring guidance it has provided for previous years (see our Checkpoint article). Here are highlights:
Extension for Furnishing Statements to Individuals. The deadline for furnishing Forms 1095-B and 1095-C to individuals is extended from January 31 to March 4, 2019. (This is slightly longer than last year’s 30-day extension because March 2, 2019, is a Saturday.) Due to this automatic extension, the discretionary 30-day extension is not available, and no further extensions may be obtained by application to the IRS. The IRS will not formally respond to any previously submitted deadline extension requests relating to 2018 statements.
No Extension for Filing Returns With the IRS. The notice does not extend the due date for filing Forms 1094-B and 1094-C (and accompanying Form 1095s) with the IRS. Accordingly, the deadline remains February 28, 2019, for paper filings, and April 1, 2019, for electronic filings. (Electronic filing is mandatory for entities required to file 250 or more Form 1095s. The 250-return threshold is calculated separately for Forms 1095-B and 1095-C.) Filers may obtain an automatic 30-day extension by filing Form 8809 on or before the regular due date. [EBIA Comment: Proposed regulations would require aggregation of most information returns when determining the 250-return threshold for mandatory electronic filing (see our Checkpoint article), but those regulations have not been finalized.]
Good Faith Penalty Relief. The IRS will again provide penalty relief for entities that can show they have made good faith efforts at compliance. No penalties will be imposed on entities that report incorrect or incomplete information—either on statements furnished to individuals or returns filed with the IRS—if they can show they made good faith efforts to comply with the reporting requirements. This relief specifically applies to missing and inaccurate taxpayer identification numbers and dates of birth, as well as other required information. Penalty relief is not available to entities that fail to furnish statements or file returns, miss an applicable deadline, or are otherwise not making good faith efforts to comply. Evidence of good faith efforts may include gathering necessary data and transmitting it to a third party to prepare the required reports, or testing the ability to transmit data to the IRS.
Those unable to meet the due dates are still encouraged to furnish and file as soon as possible, as the IRS says it will take such furnishing and filing into consideration when determining whether to abate penalties for reasonable cause. (Reasonable cause is distinct from good faith relief and requires, among other things, proof of significant mitigating factors or events beyond the reporting entity’s control.)
EBIA Comment: The operation of this extension is essentially identical to that issued for the 2016 and 2017 forms, but the notice itself contains a few differences from prior guidance, reflecting intervening developments. For example, it indicates that the IRS is considering whether and how the Code § 6055 reporting requirements should change due to the reduction of the individual shared responsibility payment to zero for months beginning after December 31, 2018 (see our Checkpoint article). In any event, the extension of the “good faith” penalty relief is especially welcome, since inadvertent reporting errors may occur as those responsible for these forms continue to familiarize themselves with the process. For more information, watch for the 2018 update to EBIA’s Form 1094/1095 Workbook, including Sections IX (“Furnishing Employee Statements”) and X (“Filing With the IRS”). See also EBIA’s Health Care Reform manual at Sections XXVIII (“Shared Responsibility for Employers (Play or Pay Penalty Tax)”), XXXVI.C (“Information Reporting of Minimum Essential Coverage (Insurers and Employers That Self-Insure)”), and XXXVI.D (“Information Reporting of Employer-Sponsored Coverage (Applicable Large Employers)”). You may also be interested in our recorded webinar “1094/1095 Reporting for 2018” (recorded on 11/15/18).
Contributing Editors: EBIA Staff.