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IRS Releases Final 2020 ACA Reporting Forms, Instructions and Penalties

Insights | IRS Releases Final 2020 ACA Reporting Forms, Instructions and Penalties

Late last week, the IRS released the finalized Affordable Care Act (ACA) reporting forms for calendar year 2020 and the final instructions. Below is a snapshot of what employers need to know.

Final Reporting Forms

In our last post, we discussed the recently issued 2020 draft reporting forms. The IRS has now released the final forms which may be viewed by clicking on the links below:

Final Instructions and New Reporting Penalty Amounts

The IRS has also released the final instructions for completing the 2020 reporting forms. There are a couple of notable changes when comparing the final 2020 instructions to those for 2019. First, the instructions now require an applicable large employer (ALE) to provide the plan start month on Form 1095-C (this was optional in the past). Second, the instructions now provide how to report individuals who were offered an individual coverage health reimbursement arrangement (ICHRA).

The final instructions also present the new penalty amounts for failing to report correct information. For 2020, the penalty amount for providing an incorrect information return or payee statement has been increased to $280 (previously $270) for each incorrect return or statement. The total penalty amount has also been increased, now not to exceed $3,392,000. This penalty cap was previously $3,339,000 for 2019.

The final instructions for the reporting forms are available below:

Please contact your HORAN account representative for any questions or additional information.

The information contained in this document is informational only and is not intended as, nor should it be construed as, legal or accounting advice. Neither HORAN nor its consultants provide legal, tax nor accounting advice of any kind. We make no legal representation, nor do we take legal responsibility of any kind regarding regulatory compliance. Please consult your counsel for a definitive interpretation of current statute and regulation, and their impact on you and your organization.