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.
Continue reading Form 1095-C Draft for Tax Year 2020 Released by IRSTag: Affordable Care Act
DC ACA Health Mandate State Reporting
It is important to realize, the new DC ACA health mandate for residents is here! 1094/1095B and 1094/1095C series forms requires submission to the state. Sooner or later, DC ACA health mandate will require action and BoomTax wants to help you! Brand new state policies does not signify uncertainty. Below are some common questions and concerns employers have. Additionally, why employers should turn to BoomTax for ACA filing!
New DC ACA health mandate?
The DC ACA health mandate requires all DC residents have a minimum essential health care coverage. Taking affect in 2019, tax year 2019 is the first time employers must take this into consideration.
What form type requires submission?
Starting tax year 2019, District of Columbia requires employers to submit a state filing for 1094/1095B and 1094/1095C series forms.
Specifications for employers to file?
The DC ACA health mandate requires employers who cover more than 50 employees with at least one individual residing in DC, must file submission. Employers do not meet specifications if, the employee commutes to DC, but does not reside there. Therefore, no submission required.
When is the deadline to file for DC ACA health mandate?
The first submission deadline for employers to file is June 30th 2020.
Can employers send the same file to federal and state?
No employers cannot. Even though the contents of the file are the same, the District of Columbia has adapted their own format for state E-filing which differs from the file format the IRS accepts. After all, this is a completely new process and quite difficult to interpret the specifications of their file format and rules.
Complexity of DC ACA health mandate format.
As previously mentioned, the District of Columbia has decided to come up with their own format for accepting state E-filing. Unfortunately, the format is very different and the complexity is much higher than the standard IRS file. Included is a downloadable excel template from DC. In short, why should employers be tasked with learning these extensive new rules? Below are some key points to take into consideration.
- Complicated file format
- Adapted pipe delimited file
- Lengthy data entries for employees with various covered individuals
- Over 600 fields of required data for each employee
- Brand new state specific rules
- Different format and rules than IRS
Give BoomTax the task!
When employers sign up with BoomTax, the process is very simple and hands off! No need to worry about file formats, complex rules, and interpreting state jargon. BoomTax will do all the hard work for you! Not to mention, our interface is a simple drag and drop for importing data or take advantage of our premade excel spreadsheet. After data upload, hit the big E-file button at the top and that’s it! Don’t worry, BoomTax sends employers real-time updates every step of the way. Given these points, don’t wait! Employers can upload data now and upon systems opening up for DC, BoomTax will send your state filing.
Does BoomTax offer other state filings?
Yes we do! Currently BoomTax supports District of Columbia and New Jersey state E-filing. Without delay, BoomTax is happy to support this new feature on the first year! BoomTax expects to expand further into state E-filing with additions of Vermont, Rhode Island, and California upon release of their specifications.
Code Guidance – Form 1095-C Code Series 1 & 2
Another tax year, another filing season! With BoomTax, you don’t have to spend endless hours laboring over getting your filings prepared and submitted to the IRS. Whether you’re brand new to BoomTax or have been a long-time customer, we’re always happy to help with your tax filing needs. With this in mind, we have created this code guidance worksheet to help with Line 14 and Line 16.
We know that figuring out codes can be complicated, but we are always here to answer any questions you may have. Reach out today and we can help you get started!
Code Guidance Line 14 – Series 1
Form 1095-C – Line 14, Offer of Coverage
It is required to be filled out for every month of the year, even if the employee was not employed the entire year.
There are a variety of codes that can be input here. Below is a chart that shows the code (ie: 1A), the code description, and when to use each code.
| Description | When to use this code | |
|---|---|---|
| 1A | • The employer made a Qualifying Offer. • The employer offered Minimum Essential Coverage (MEC) with Minimum Value (MV) to the employee (EE). • The offer is affordable, because it’s less than or equal to 9.5% of the single, mainland federal poverty line. • The employer also offered MEC to the spouse and dependents. | • The employer offered coverage to employees, spouses, and children. • The employer offered Minimum Essential Coverage providing Minimum Value. • The coverage is affordable at the employee only level because it’s less than or equal to 9.5% of the single, mainland federal poverty line. |
| 1B | • The employer only offered coverage to employees. • The coverage is Minimum Essential Coverage (MEC) and provides Minimum Value (MV). | • The employer excluded spouses and children from the offered plan. |
| 1C | • The employer offered coverage to employees (EEs) that is Minimum Essential Coverage (MEC) and Minimum Value. • The employer also offered MEC to EEs children. • Spouses are not offered coverage. | • The employer excluded spouses from the offered plan. |
| 1D | • The employer offered coverage to employees that is Minimum Essential Coverage (MEC) and Minimum Value. • The employer also offered MEC to the spouses. • Children are not offered coverage. | • The employer excluded children from the offered plan. |
| 1E | • The employer offered coverage to employees that is Minimum Essential Coverage (MEC) and Minimum Value. • The employer also offered MEC to EEs spouses and children. | • The difference between 1E and 1A is that the offered coverage may not be affordable or it is affordable based on a different safe harbor (other than the federal poverty line). |
| 1F | • The employer offered Minimum Essential Coverage (MEC) to the employee, BUT the coverage does not provide Minimum Value (MV). • The employer also offered MEC to the employee and spouse and/or dependents, BUT the coverage does not provide MV. | • The offered coverage does not provide Minimum Value (MV). |
| 1G | • The employer offered self-insured coverage to an employee who was not full time at any point in the year. | • The employer offered self-insured coverage to an employee (EE) who was not full time at any point in the year. • Non-full time EEs are eligible for your plan. • The EE was enrolled in the plan for the month in which this code is entered. |
| 1H | • The employer made no offer of coverage. • OR The employer made an offer that didn’t provide Minimum Essential Coverage for the employee. | • The employee (EE) was not yet hired. • The EE was in a limited non-assessment period (LNAP)(e.g. waiting period or initial measurement period). • The EE was otherwise ineligible for coverage. • The offer of coverage was not Minimum Essential Coverage (MEC). • The offer of coverage was not for an entire month. • The EE terminated and the employer offered COBRA. • The EE made no offer to the employee, but the employer is using qualifying offer transition relief. |
| 1J | • The employer offered coverage to employees that is Minimum Essential Coverage (MEC) and Minimum Value (MV). • The employer also conditionally offered MEC to spouse, but not to dependents. | • The employer made an offer to cover an employee's spouse only if the spouse is not eligible for coverage under Medicare or a group health plan sponsored by another employer. |
| 1K | • The employer offered coverage to employees and their dependents that is Minimum Essential Coverage (MEC) and Minimum Value (MV). • The employer also conditionally offered MEC to spouse. | • The employer made an offer to cover an employee’s spouse only if the spouse is not eligible for coverage under Medicare or a group health plan sponsored by another employer. |
We know that figuring out codes can be complicated, but we are always here to answer any questions you may have. Reach out today and we can help you get started!
Line 16 – Series 2
Form 1095-C – Line 16, Section 4980H Safe Harbor and Other Relief
Here, an ALE Member enters the appropriate code, if any, that apply to the employee. Line 16 is not required for every month, but it is highly recommended, if any apply.
There are a variety of codes that can be input here, as well. Below is a chart that shows the code (ie: 2A), the code description, and when to use each code.
| Description | When to use this code | |
|---|---|---|
| 2A | • The employer did not employ this person during the month. | • The employee is not yet hired. • The employee is no longer employed. |
| 2B | • The employee was not full-time for this month. | • The employee is part time. • The employee is a seasonal or variable hour employee. • The employee is in a measurement period and his/her FT status is not yet established (See Code 2D). • The employee was terminated and is not offered coverage for the entire month of termination. |
| 2C | • The employee enrolled in the coverage you offered. | • The employee accepts and enrolls in the employer's offer of coverage. • If there is an option between 2C and another code, use 2C. |
| 2D | • The employee was in a Limited Non-Assessment Period (LNAP) for the month. | • The employee is in a waiting period under the Monthly or Look-Back measurement method. • The employee is in an initial measurement period under the Look-Back method. • The employee is in the first calendar month of employment and did not start on the first day of the month. • It is the employer's first year as an applicable large employer (ALE). • The employee has a change in status during his/her initial look-back measurement period. • The employee is in a non-assessment period (e.g. waiting period or initial measurement period). |
| 2E | • The employer is eligible for the multi-employer interim relief rule. | • Some portion of the employer's workforce is eligible for a multi-employer (union) plan. • The employer made an ongoing contribution to the plan on behalf of union employees. |
| 2F | • The coverage the employer offered is affordable based on the Form W-2 safe harbor. | • Coverage is affordable for this employee based on the W-2 safe harbor method. • The employer used the W-2 safe harbor for every month that the employee is offered coverage. |
| 2G | • The coverage the employer offered is affordable based on the Federal Poverty Line safe harbor. | • Coverage is affordable to this employee based on the federal poverty line safe harbor method. |
| 2H | • The coverage the employer offered is affordable based on the Rate of Pay safe harbor. | • Coverage is affordable to this employee based on the rate of pay safe harbor method. |
For more guidance on related topics, please follow the links below:
- How to Prepare, Distribute, & File with BoomTax (2019)
- 1095-C Step-by-Step Guide (2019)
- Spreadsheet Format Guidelines (2019)
Questions?
If you have any questions, concerns, or comments about our product, feel free to contact us at [email protected]. A customer support representative will reach out to you promptly.
BoomTax does not provide tax or legal advice and any information contained in this document should not be construed as such. Always consult with a tax or legal professional regarding your specific situation.