Mastering Form 1094-C: The Essential Guide

Form 1094-C is a transmittal form that must be filed to the IRS along with Forms 1095-C. It is used as a cover sheet and summary of the information being filed.

What are Forms 1094-C and 1095-C?

For employers, Form 1094-C, combined with Forms 1095-C, is used to determine whether an Applicable Large Employer (ALE) owes an employer shared responsibility provision (ESRP) payment under IRS section 4980H. 

Form 1095-C provides information regarding health coverage offered by an employer for each employee to both the IRS and the employees. A form must be completed for each individual that was a full-time employee for any month of the calendar year, and must be provided to each individual. For employees, this form is used in determining eligibility for the premium tax credit.

What’s the difference between Form 1094-B and 1094-C?

Both of these are summary forms for filings that provide health coverage information. They provide the IRS with some basic information about the filer, but that is where the similarities end.

Form 1094-B is purely a summary form that is included with a Form 1095-B filing. It’s a very simple form with minimal information required.

Form 1094-C is also a summary form, but it’s included with a Form 1095-C filing. It requires the same basic data, such as the filer’s name, address, EIN, and so on. It also requires much more detailed information regarding the offer of coverage, monthly headcounts of employees, and information regarding other ALE Members of an Aggregated ALE Group (if applicable).

An ALE Member is generally an employer with 50 or more full-time or full-time equivalent employees in the previous year. An Aggregated ALE Group is a group of employers that, combined, employed 50 or more full-time or full-time equivalent employees in the previous year on average.

What information is reported on Form 1094-C?

This form is a bit more complex than most transmittal, or summary, forms. It is broken up into 4 parts: Applicable Large Employer Member, ALE Member Information, ALE Member Information Monthly, and Other ALE Members of an Aggregated ALE Group.

Form 1094-C, Part I – Applicable Large Employer Member (ALE Member)

This section is what is typically expected from a summary form. It includes basic information for the filer and a total form count for the filing. It has the following boxes to report information:

  • Box 1 – Name of ALE Member (Employer)
  • Box 2 – Employer identification number (EIN)
  • Box 3-6 – Address information
  • Box 7-8 – Contact Person
  • Box 9-16 – Designated Government Entity (DGE) Information (only if applicable)
  • Box 17 – Reserved
  • Box 18 – Total number of Forms 1095-C submitted with the filing
  • Box 19 – Authoritative Transmittal Checkbox
Image of Form 1094-C, Part I
Image of Form 1094-C, Part I

Form 1094-C, Part II – ALE Member Information

This section includes the following boxes to report information:

  • Box 20 – Total number of Forms 1095-C filed by and/or on behalf of ALE Member
  • Box 21 – Is ALE Member a member of an Aggregated ALE Group? Checkbox
  • Box 22 – Certifications of Eligibility Checkbox
    • Qualifying Offer Method – To use this option, the employer must certify that it made a Qualifying Offer to one or more of its full-time employees for all months during the year in which the employee was a full-time employee for whom an employer shared responsibility payment could apply.
    • D. 98% Offer Method – To use this option, the employer must certify that it offered affordable health coverage providing minimum value to at least 98% of its employees for whom it is filing a Form 1095-C employee statement. This takes into account all months during which the individuals were employees of the employer and were not in a Limited Non-Assessment Period. The employer must also certify that it offered minimum essential coverage (MEC) to those employees’ dependents.
Image of Form 1094-C, Part II
Image of Form 1094-C, Part II

Form 1094-C, Part III – ALE Member Information – Monthly

This section gives more information about the ALE Member and is split into 13 lines. It gives the IRS more details regarding the offer of coverage and monthly head-counts for the ALE member throughout the year. Complete either Line 23 – All 12 months, OR Lines 24 – 35 – January through December.

These lines have 5 columns of data that should be completed:

  • Column (a) – Minimum Essential Coverage Offer Indicator
    • This column is used to indicate the months in which the ALE Member offered minimum essential coverage to at least 95% of its full-time employees and their dependents.
      • For the months, if any, the ALE Member did not meet these requirements, select the “No” indicator checkbox for each applicable month.
      • For the months, if any, the ALE Member met these requirements, select the “Yes” indicator checkbox for each applicable month.
  • Column (b) – Section 4980H Full-Time Employee Count for ALE Member
    • This column is used to list the total number of full-time employees for each month of the year. This count should not include any individuals who were in a Limited Non-Assessment Period (LNAP).
  • Column (c) – Total Employee Count for ALE Member
    • This column is used to list the total number of employees for the ALE Member for each month of the year. This count should include all employees: full-time employees, non-full-time employees, employees in an LNAP, etc.
  • Column (d) – Aggregated Group Indicator (only check the box if applicable)
    • This column is used to indicate the months (if any) that the ALE Member was a member of an Aggregated ALE Group.
  • Column (e) – Reserved

For both columns (c) and (d), the ALE Member must choose one of the following days of the month to determine the number of employees per month, and must use that day for all months of the year:

  1. The first day of each month,
  2. The last day of each month,
  3. The 12th day of each month,
  4. The first day of the first monthly payroll period, or
  5. The last day of the first payroll period that starts during each month (provided that the last day of the payroll period falls within the same month that the payroll period began).
Image of Form 1094-C, Part III
Image of Form 1094-C, Part III

Form 1094-C, Part IV – Other ALE Members of Aggregated ALE Group

An Aggregated ALE Group is a group of ALE Members, or employers, that are treated as a single employer for ACA reporting purposes. Companies that share common ownership or are otherwise related are considered part of an Aggregated ALE Group.

This section should be completed by inputting the names and EINs of the other members of the Aggregated ALE group. This should only be completed if applicable. It includes the following boxes to report information:

  • Lines 36 – 65 – Name and EIN of other ALE Members of Aggregated ALE Group
Image of Form 1094-C, Part IV
Image of Form 1094-C, Part IV

Who needs to file Forms 1094-C and 1095-C with the IRS?

Each ALE Member must submit an ACA filing consisting of Forms 1094-C and 1095-C. There must be a Form 1095-C for each employee that was full-time for any month of the calendar year, and a copy of the form must be furnished to the employee.

Each ALE Member of an Aggregated ALE Group must submit a separate filing reporting an offer of coverage to its employees, even if the ALE Member has fewer than 50 full-time employees on its own.

Who needs to file Forms 1094-C and 1095-C with the state?

Along with the federal filing and recipient furnishing requirements, some states have individual requirements as well.

California, the District of Columbia, Massachusetts, New Jersey, Rhode Island, and Vermont have Individual Mandates in place that require employers to report ACA data on the state level, as well as the federal.

Always be sure to check State ACA Requirements to ensure that you don’t miss anything.

When is the deadline to file Form 1094-C with the IRS?

Traditionally, the filing deadlines for Forms 1094-C & 1095-C are as follows:

  • Submit a Paper Filing – February 28th
  • Furnish Recipient Copies – March 2nd
  • Submit an Electronic Filing – March 31st

If these deadlines fall on a weekend or legal holiday, then the due date is typically the following business day. Check out our annually updated deadlines article for the most up-to-date information.

The Forms 1095-C must be submitted along with the summary. View our Essential Guide: Mastering Form 1095-C to learn more about Form 1095-C.

Can I submit a paper filing?

Employers may choose to paper file their Forms 1094-C and 1095-C with the IRS if their total Form 1095-C count is less than the 250-form threshold. E-filing is encouraged by the IRS, but if you have less than 250 forms to file, then paper filing is an option.

When filing on paper, you must send the forms to the IRS in a flat mailing envelope without staples or paperclips. These forms can be printed on regular paper in landscape format, and special forms do not need to be ordered.

If you have many forms to send, then you can send them in conveniently sized packages. Each package must be labeled with your name and should be numbered consecutively. The summary Form 1094-C should be placed in the first package along with Form 1095-C. Additional Forms 1095-C can be included in the other packages, if applicable. Please note that postal regulations require that packages with forms must be sent via first-class mail.

Determining where to send your filing is dependent upon the filer’s address; specifically, the state. Find your state in the graphic below for the correct IRS mailing address for your filing.

1095-C IRS addresses
IRS Addresses by State

Can I download Form 1095-C?

Yes, you can download a PDF version of this form from the IRS website. This copy can be completed and printed out in landscape format with black ink to distribute to recipients and/or send to the IRS.

Can I submit a filing electronically?

Yes, of course! E-filing is encouraged by the IRS and offers many benefits. These benefits include immediate submission, quick turnaround time, status updates, and more.

E-filing can be a requirement for some filers. If filing more than 250 Forms 1095-C, then you must submit your filing electronically.

If choosing to submit your filing electronically, be sure to find an authorized ACA software provider to make e-filing quick and easy!

What are the penalties for not filing Form 1094-C?

All employers subject to ESRP (and other employers that sponsor self-insured plans) that fail to comply with the IRS reporting requirements may be subject to penalties for failure to file. For the tax year 2021, the following penalties may apply:

  • Failure to file correct forms – $280 per form
  • Failure to furnish recipient forms – $280 per form
  • Failure to file electronically, when required to do so – $280 per form

Special rules apply that increase the per-return and per-statement and total penalties with no maximum limitations if there is intentional disregard of the requirement to file the returns and furnish recipient statements.

Form 1094-C Instructions

Check out the graphic below to see how quickly fines can accumulate based on a sample size of 250 forms the business should have filed.

Form 1095-C Penalties
IRS Potential Fine Amounts

How do I make a correction?

It is important that you take the time to review the information you are reporting on your Form 1094-C for accuracy before filing. This will minimize the risk of common errors that can result in your business incurring penalties and fines.

Even with careful reviewing, mistakes can happen! If your filing has errors, you can easily make corrections to your Forms 1095-C.

  • If you submitted your original filing electronically, then you should edit your filing accordingly with the original vendor.
  • If you submitted your original filing via mail, then you should complete a new form and include the updated information.
    • Once this has been completed, simply check the “Corrected” box at the top of the form.

Before you can consider your correction complete, an updated copy of the form must be provided to the recipient as well. This ensures that all parties have updated information.

Conclusion

Once you have submitted your Forms 1094-C and 1095-C to the IRS, either electronically or via mail, and have received your “Accepted” status, then you have met all of the IRS requirements for these forms.

If you’re looking for a broken-down Understanding ACA Summary Forms guide in a downloadable format, make sure to download our PDF guide.

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.

Leave a comment