H&W 2016 Transition Relief for Section 6055 and 6056 Reporting

Extension for Providing Employee Statements

The IRS has announced 2016 transition relief that includes a 30 day extension to furnish the Section 6055 & 6056 employee statements to employees.  This extension results in a due date of March 2, 2017 instead of the original deadline of January 31.

Under sections 6055 & 6056 a filer may request an extension of time to provide employee statements if they submit such request in writing and can show good cause for doing so.  In light of the IRS’ automatic March 2 extension, the option to request a good cause extension will not apply.  Please note that the IRS will not formally respond to any good cause extension requests that they may have already received.

Because of the extension granted under this notice, some individual taxpayers may not receive a Form 1095-B or Form 1095-C by the time they are ready to file their 2016 tax return. Taxpayers may rely on other information received from their employer for purposes of filing their returns, including determining eligibility for the premium tax credit and confirming that they had minimum essential coverage. Taxpayers do not need to wait to receive Forms 1095-B and 1095-C before filing their returns. Individuals need not send the information relied upon to the IRS when filing their returns, but should keep it with their tax records.

No Automatic Extension for Filing with the IRS

Note that the due date for filing the 1094/1095 forms with the IRS has NOT been extended.  Those filings are still due by February 28 if filing paper returns (March 31 if filing electronically).  Since an extension has not automatically been provided for these filings, an extension can be requested by submitting Form 8809.

Good Faith Penalty Relief

The 2015 penalty relief for reporting entities that made a good-faith effort to comply with the reporting requirements has also been extended to 2016.  This relief applies only to incorrect and incomplete information reported on the statement or return and is not provided for a failure to timely furnish or file a statement or return.  This relief applies to both the provision of employee statements as well as filing returns with the IRS.

In determining good faith, they will take into account whether an employer made reasonable efforts to prepare the information, such as gathering and transmitting the necessary data to an agent to prepare the data for submission to the IRS or testing its ability to transmit information to the IRS.  In addition, they will take into account the extent to which the employer is taking steps to ensure that it will be able to comply with reporting requirements for 2017.

The Treasury and the IRS do not anticipate extending this transition relief, either with respect to the due dates or the penalties, to 2017 reporting.