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Time to Update Your Affordable Care Act Tax Form Checklist

Nov 17th 2015
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The laundry list of reporting requirements under the Affordable Care Act, the massive healthcare law known as Obamacare, keeps getting longer.

Greatland Corp., a provider of W-2 and 1099 products for businesses, has put together a checklist of updated tax forms that you can use to help clients prepare for the onslaught next year.

The Affordable Care Act requires all providers of health care, including employers that provide self-insured coverage, to file returns with the IRS including information about the coverage and each covered individual. This information is reported on forms 1095-B or 1095-C, depending on the size of the employer. The 1095 forms became mandatory in the 2015 tax year.

Not only do providers and employers have to send the forms to eligible recipients, but the IRS must also receives copies. Filers with 250 or more forms must file them electronically. Incorrect filings won't be penalized for 2015 filings reported in 2016 if the forms are filed on time and providers and employers make a good-faith effort to comply.

Here is a summary of the new forms relating to the Affordable Care Act, as well as changes the IRS has made to W-2 and 1099 forms this year, according to Greatland.

Affordable Care Act

  • Form 1095-B, Health Coverage. Insurers and self-insured employers providing health plans are required to report data on all covered individuals.
  • Form 1094-B, Transmittal of Health Coverage Information Returns (Form 1094 is the transmittal for Form 1095-B).
  • Form 1095-C, Employer-Provided Health Insurance Offer and Coverage. Employers with 50 or more full-time employees (including full-time equivalent employees) must provide each full-time employee with Form 1095-C. This form includes such information as whether the employee was offered coverage, the length of time, and the employee's share of the lowest-cost monthly premium for self-only minimum value coverage. A large employer with a self-insured plan is only required to submit Form 1095-C because it can include information from Form 1095-B.
  • Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns.

2015 W-2 Form Changes

Medicaid waiver payments. Certain Medicaid waiver payments are excludable from income for federal income tax purposes. See Notice 2014-7 for additional information.

Third-party sick pay recap reporting. For wages paid in 2015, Form 8922, Third-Party Sick Pay Recap, will be used to report total third-party sick pay wages paid to employees when liability for the employer and the employee portions of Federal Insurance Contributions Act (FICA) taxes on wages is split between the employer and the third-party payer. Form 8922 replaces the Third-Party Sick Pay Recap Form W-2 and W-3. Form 8922 is filed with the IRS rather than the US Social Security Administration (SSA).

Virtual currency. The fair market value of virtual currency, such as bitcoin, that is paid as wages is subject to federal income tax withholding, FICA tax, and Federal Unemployment Tax Act tax. This must be reported on Form W-2.

1099 and Related Form Changes

Form 1096, Annual Summary and Transmittal of US Information Returns. This has a compilation sheet showing the totals of the information returns that you are physically mailing to the IRS. The checkbox for Form 1099-H was removed from line 6, while a checkbox for Form 1098-Q was added to line 6. The spacing for all checkboxes on line 6 was expanded. The amounts reported in box 13 of Form 1099-INT should now be included in box 5 of Form 1096 when filing Form 1099-INT with the IRS.

Form 1098-C, Contributions of Motor Vehicles, Boats, and Airplanes. A donee organization must file a separate Form 1098-C with the IRS for each contribution of a qualified vehicle that has a claimed value of more than $500. All filers of this form may truncate a donor's identification number (e.g., Social Security number, individual taxpayer identification number, adoption taxpayer identification number, or employer identification number) on written acknowledgements. Truncation is not allowed, however, on any documents filed with the IRS.

Form 1099-B, Proceeds From Broker and Barter Exchange Transactions. For a sale of debt instrument that is a wash sale and has accrued market discount, enter code “W” in box 1f and the amount of the wash sale loss disallowed in box 1g.

Form 1099-DIV, Dividends and Distributions. This form is issued to those who have received dividends from stocks. A new checkbox was added to this form to identify a foreign financial institution filing this form to satisfy its Chapter 4 reporting requirement.

Form 1099-INT, Interest Income. This form is used to report interest income from banks and other financial institutions. Box 13 was added to report bond premium on tax-exempt bonds. All later boxes were renumbered. A new checkbox was added to this form to identify a foreign financial institution filing this form to satisfy its Chapter 4 reporting requirement.

Form 1099-K, Payment Card and Third-Party Network Transactions. This form is given to those merchants accepting payment card transactions. Completion of box 1b (Card Not Present transactions) is now mandatory for 2015.

Form 1099-MISC, Miscellaneous Income. This form reports the total paid during the year to a single person or entity for services provided. Certain Medicaid waiver payments may be excludable from the income as difficulty of care payments. A new checkbox was added to this form to identify a foreign financial institution filing this form to satisfy its Chapter 4 reporting requirement.

Important Dates to Remember

Greatland's comprehensive summary also includes the following important filing dates to remember:

  • Feb. 1, 2016: Due date to mail recipient copies for W-2, 1099, and 1095 forms
  • Feb. 29, 2016: Due date to send paper format of 1099 and 1095 federal (IRS) filing
  • Feb. 29, 2016: Due date to send paper format of W-2 federal (SSA) filing
  • March 31, 2016: Due date to send e-file format of W-2, 1099, and 1095 federal (SSA/IRS) filings

Note: Form 1095 does not need to be filed at the state level.

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