Within the past 2 years, the IRS has refined their ACA e-file process and the introduction of newer more obscure error codes is an example of this.
What does error code 1095C-019-05 mean?
In short, this error code indicates that you’ve used a value of $3500 or more in the employee share section (box #15) of the 1095-C. This error check applies to every month in #15 of the 1095-C including with the ‘All 12 Months’ box.
Why does error code 1095C-019-05 exist?
The IRS introduces data validation rules to ensure data is correctly entered prior to being processed by the IRS. You can think of this new error as ‘sanity check’ to ensure that the values the IRS receives make sense in the broader scheme of reporting.
The simplest way to think about this error is as an upper bound check. Similar to how the IRS ensures you don’t enter a negative value into #15, (how would a negative employee contribution make sense?), the IRS is trying to ensure that an overly high incorrect data entry isn’t counted against you come reporting time.
This error code also corrects a common misconception that the ‘All 12 Months’ box is a summation of the values from Jan-Dec. The ‘All 12 Months’ box in #15 of the 1095-C represents a shorthand way of copying and pasting the contribution amount from this box into all months of Jan-Dec. For example, an entry of $3500 for All 12 Months in #15 would be the same as putting Jan – $3500, Feb – $3500, Mar – $3500 and so on…
While healthcare premiums are reaching ever increasing highs, an employee only share of the lowest cost premium shouldn’t be anywhere close to $3500 per month. If it is, AND you are an ALE, AND your employee is eligible for coverage AND your employee happens to claim a premium tax credit, you may receive a penalty letter from the IRS.
What is the official guidance from the IRS for error code 1095C-019-05?
The official guidance from the IRS AIR ACA site says the following:
If Form 1095C ‘AnnualOfferOfCoverageCd’ has a value of “1B”, or “1C”, or “1D” or “1E”, or “1J”, or “1K”, or “1L”, or “1M”, or “1N”, or “1O”, or “1P”, or “1Q”, or “1T”, or “1U”, then ‘AnnlEmployeeRequiredContriAmt’ or all instances of ‘MonthlyEmployeeRequiredContriGrp’ (‘JanuaryAmt’ through ‘DecemberAmt’) must have a value less than 3,500.IRS Business Rules Versions PDF and CSV
How do I fix error code 1095C-019-05?
The fix for this error code is relatively easy. Simply replace the erroneously high employee share in the 1095-C #15 with the correct employee only share of the lowest cost plan that offers minimum value.
If the value you’ve entered is the value you have from your benefits provider, we recommend following up to ensure this value is correct.
When did error code 1095C-019-05 come into effect?
From our analysis, this error code first showed up in TY2020, but was rarely encountered by most IRS AIR ACA filers.
What other errors codes could you expect to find from filing ACA forms with the IRS AIR system?
Error code 1095C-019-05 is one of many ACA error codes and business rules currently in effect for tax reporting. Make sure to check out our easy to follow list of Common IRS ACA UI AIR Error Codes to get a more comprehensive picture of the types of issues you could run into (along with guidance on how to patch these up).
How well do you know your ACA codes?
Our comprehensive ACA code guidance covers all of the possible codes for 1095-C: #14, #15, #16, and #17 and breaks this down into plain English with no unnecessary jargon.
We also have an interactive Form 1095-C Code Guidance questionnaire that can be used to help determine which codes you might need. Check it out here:
BoomTax, The Boom Post, and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors prior to engaging in any transaction.