IRS Provides Transition Relief for 2020 ACA Reporting

On Oct. 2, 2020, the Internal Revenue Service (IRS) issued Notice 2020-76 to:

  • Extend the due date for furnishing forms under Sections 6055 and 6056 for 2020 from Feb. 1, 2021, to March 2, 2021; and
  • Provide a final extension of good-faith transition relief from penalties related to 2020 information reporting under Sections 6055 and 6056; and
  • Provide additional penalty relief related to furnishing 2020 forms to individuals under Section 6055. Under this relief, employers will only have to provide Form 1095-B to covered individuals upon request.

The due date for filing forms with the IRS for 2020 remains March 1, 2021 (since Feb. 28, 2021, is a Sunday), or March 31, 2021, if filing electronically.

Action Steps

The IRS is encouraging reporting entities to furnish 2020 statements as soon as they are able. No request or other documentation is required to take advantage of the extended deadline.

According to Notice 2020-76, this is the last year that the IRS intends to provide good-faith relief from penalties, since it was intended to be transitional relief only.

Sections 6055 and 6056 Reporting

Sections 6055 and 6056 were added to the Internal Revenue Code (Code) by the Affordable Care Act (ACA).

  • Section 6055 applies to providers of minimum essential coverage (MEC), such as health insurance issuers and employers with self-insured health plans. These entities will generally use Forms 1094-B and 1095-B to report information about the coverage they provided during the previous year.

Section 6056 applies to applicable large employers (ALEs)—generally, those employers with 50 or more full-time employees, including full-time equivalents, in the previous year. ALEs will use Forms 1094-C and 1095-C to report information relating to the health coverage that they offer (or do not offer) to their full-time employees.