Form 1095-C Draft for Tax Year 2020 Released by IRS

The IRS has released an updated Form 1095-C draft for Tax Year 2020. The new draft has a few major changes you should know about. This draft will help employers prepare for 2020 Affordable Care Act (ACA) Reporting. A finalized version of the form should be released by early 2021.

Key Proposed Changes

The Form 1095-C draft has a few important changes, many of which are because of the newly issues regulation supporting ICHRAs (Individual Coverage Health Reimbursement Arrangement).

The first major change is the addition of eight (8) new series 1 codes (1L-1S), all describing how the employer determined affordability for those who had an ICHRA.

CodeDescription
1LIndividual coverage health reimbursement arrangement (HRA) offered to you only with affordability determined by using employee’s primary residence location ZIP Code.
1MIndividual coverage HRA offered to you and dependent(s) (not spouse) with affordability determined by using employee’s primary residence location ZIP Code.
1NIndividual coverage HRA offered to you, spouse and dependent(s) with affordability determined by using employee’s primary residence location
1OIndividual coverage HRA offered to you only using the employee’s primary employment site ZIP Code affordability safe harbor.
1PIndividual coverage HRA offered to you and dependent(s) (not spouse) using the employee’s primary employment site ZIP Code affordability safe harbor.
1QIndividual coverage HRA offered to you, spouse and dependent(s) using the employee’s primary employment site ZIP Code affordability safe harbor.
1RIndividual coverage HRA that is NOT affordable offered to you; employee and spouse or dependent(s); or employee, spouse, and dependents.
1SIndividual coverage HRA offered to an individual who was not a full-time employee.

The next big change is the addition of Line 17, ZIP Code in Part II, Employee Offer of Coverage. According the IRS instructions on Form 1095-C, “this line reports the applicable ZIP Code the employer used for determining affordability if they offered an ICHRA. If code 1L, 1M, or 1N was used on line 14, this will be the employee’s primary residence location. If code 1O, 1P, or 1Q was used on line 14, this will be the employee’s primary work location.”

The last change is the inclusion of a new box in Part II for employee age at the start of the year.

Although there has been some big changes issues in the Form 1095-C Draft, the good news is that most employers will not be affected much by these new additions.

ACA Reporting Made Easy

BoomTax was created to provide employers with a simple solution for information reporting. We focus on keeping things simple! That means no overwhelming tax forms, no complicated jargon, and no boring software.

With BoomTax, you can easily upload your data, and distribute and e-file your 1094-C and 1095-C forms within a few clicks. We will walk you through every step of the process. Our simple step-by-step approach allows you to easily complete your IRS ACA reporting. There is no need to learn any complicated software or complete specialized training.

Check out our blog and KnowledgeBase for updates, information, and answers to our most popular questions regarding ACA filing and more!

You can also contact us for more information!

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