Do you still Have to File?
How the Executive Order concerning the Individual Mandate as well as state laws affect you and your employees starting this year
On December 22, 2017, President Trump signed the Tax Cuts and Jobs Act bill of 2017 into law. The resulting piece of legislation, which will take effect this year (tax year 2019), will abolish the enforcement of penalties for not taking health coverage. The penalty was paid in conjunction with personal tax filing. Based on history, this change in legislation will have a minimal effect on most individuals. The IRS has reported in previous years that about 4 million tax returns had paid the individual mandate penalties.
Employer Reporting and Penalties Continue into 2019Despite the elimination of the Individual Mandate Penalty, all employer reporting for 1094-95 B and 1094-95 C (Forms to employees and filing with the IRS) will remain into effect. Following the signing of the bill in 2017 the IRS issued a series of letters regarding its position on the ACA’s individual and employer mandate penalties. As clarified in each of these letters, “the Executive Order does not change the law; the legislative provisions of the ACA are still in force until changed by the Congress, and taxpayers remain required to follow the law.” This includes all required employer reporting and payment of any applicable penalties.
State-based Individual Mandates EmergeSince the signing of the Executive Order, six states have already passed their own statewide individual mandates. These states include New Jersey, Massachusetts, District of Columbia, Vermont and most recently, California. Connecticut, Maryland, Minnesota, and Washington are also considering implementing their own laws. New Jersey has recently released guidance which states that employers are to submit existing ACA forms 1094 and 1095 B and C where applicable. The state has also instructed that employers will file the forms through New Jersey’s W‑2 filing system. EmployeeTech will be supporting this starting in 2019.
Filing for 2016-2018We have heard from a handful of employers that due to unforeseen circumstances, did not file for prior tax years. Just this year, EmployeeTech instituted the ability to file delinquent ACA filing going back to the tax year of 2016. This includes both forms to employees and filing with the IRS.