On Monday, December 28, 2015, the Internal Revenue Service announced in Notice 2016-4 that employers will have additional time to file annual reports required under the Patient Protection and Affordable Care Act (“ACA”). The ACA requires certain employers to report minimum essential coverage annually on Forms 1094 and 1095. These forms were originally due to employees on February 1, 2016 and employers had until March 31, 2016 to file the forms electronically with the IRS (February 29, 2016 for non-electronic filers). However, Notice 2016-4 extends both of those deadlines for all employers required to file Forms 1094 and 1095.
The new deadlines are as follows:
New Deadline for Forms 1095-B and 1095-C to Individuals: March 31, 2016.
New Deadline for Forms 1094 and 1095 to the IRS: June 30, 2016 for electronic filers and May 31, 2016 for non-electronic filers.
The IRS indicated that it had determined that providers needed “additional time to adapt and implement systems to gather, analyze and report this information.”
Employers should note that the penalties for failure to timely file (and failure to timely furnish) Forms 1095-C were increased earlier this year, from $100 per failure to $250 per failure. There are a number of exceptions and modifications that can reduce the penalties in certain circumstances, and can increase the penalties in other circumstances, but extending the deadlines so that employers have sufficient time to satisfy their obligations is the most effective penalty relief.
- NEW FBAR FILING DUE DATES – New due date is April 15 for returns for taxable years beginning after December 31, 2015. Taxpayers will be allowed a six-month extension to October 15. For any taxpayer required to file an FBAR for the first time, any penalty for failure to timely request or file an extension may be waived by the IRS. Please contact your tax preparer with any questions.
- PARTNERSHIP RETURN DUE DATES – New due date is March 15 (for calendar-year partnerships) and the 15th day of the third month following the close of the fiscal year (for fiscal-year partnerships). Currently, these returns are due on April 15, for calendar-year partnerships. Maximum filing extension of six months for Forms 1065, U.S. Return of Partnership Income. Please contact your tax preparer with any questions.
- C CORPORATION RETURN DUE DATES – New due date is the 15th day of the fourth month following the close of the corporation’s year (April 15 for calendar-year corporations) – these returns are currently due on the 15th day of the third month following the close of the corporation’s year.
C corporations will be allowed an automatic 6-month extension to file, except that calendar-year corporations would get a five-month extension until 2026. Corporations with a June 30 year end would get a seven-month extension until 2026. The new filing due dates will apply to returns for tax years beginning after December 31, 2015. However, for C corporations with fiscal years ending on June 30, the new filing due dates will not apply until tax years beginning after December 31, 2025
EXTENSIONS OF FILING TIME – New extensions for returns for taxable years beginning after December 31, 2015:
- 5 1/2 months ending on September 30 for calendar year taxpayers on Form 1041, U.S. Income Tax Return for Estates and Trusts;
- 3 1/2 months ending on November 15 for calendar year plans on Form 5500, Annual Return/Report of Employee Benefit Plan;
- 6 months ending on November 15 for calendar year filers on Form 990, Return of Organization Exempt From Income Tax;
- an automatic 6-month period beginning on the due date for filing the return (without regard to any extensions) on Form 4720, Return of Certain Excise Taxes
- an automatic 6-month period beginning on the due date for filing the return (without regard to any extensions) Form 5227, Split-Interest Trust Information Return;
- an automatic 6-month period beginning on the due date for filing the return (without regard to any extensions) on Form 6069, Return of Excise Tax on Excess Contributions to Black Lung Benefit Trust
- an automatic 6-month period beginning on the due date for filing the return (without regard to any extensions) on Form 8870, Information Return for Transfers Associated With Certain Personal Benefit Contracts; and
- the due date for Form 3520, Annual Return to Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts, will be April 15 for calendar-year filers, with a maximum six-month extension. The due date of Form
- 3520–A, Annual Information Return of a Foreign Trust with a United States Owner, shall be the 15th day of the third month after the close of the trust’s taxable year, with a maximum six-month extension.
H.R. 3236 also requires tax payers to provide additional information on mortgage information statements and consistent basis reporting between estates and beneficiaries.
MODIFICATION OF MORTGAGE REPORTING REQUIREMENTS ON RETURNS RELATING TO MORTGAGE INTEREST RECEIVED IN TRADE OR BUSINESS FROM INDIVIDUALS- New information on mortgage information statements required to be sent to individuals who pay more than $600 in mortgage interest in a year. These statements will now be required to report the outstanding principal on the mortgage at the beginning of the calendar year, the address of the property securing the mortgage, and the mortgage origination date. This change applies to returns required to be made and statements required to be furnished after December 31, 2016.
CONSISTENT BASIS REPORTING BETWEEN ESTATE AND BENEFICIARIES – Anyone inheriting property from a decedent cannot treat the property as having a higher basis than the basis reported by the estate for estate tax purposes. Estate executors who are required to file an estate tax return must furnish a statement identifying the value of each interest in the property as reported on the estate tax return to the IRS and to each person acquiring any interest in property included in the decedent’s gross estate for Federal estate tax purposes. These statements identify the value of each interest in property acquired from the estate as reported on the tax return and must be filed on or before the earlier of the date which is 30 days after the date on which the return was required to be filed or the date which is 30 days after the date such return is filed. These new reporting provisions apply to property with respect to which an estate tax return is filed after the date of enactment (July 31, 2015). Please contact your tax preparer with any questions.
If your health insurance plan provides for self-insurance, includes a Health Reimbursement Account, post-retirement benefits, and/or certain Health Flex Savings Accounts you may be subject to an annual excise tax.
Please consult your Health Insurance Professionals for guidance and more information to determine if this excise tax applies to you.
The annual form 720 and required tax are due on July 31.
We can provide assistance with completing and filing of the form 720 to report the excise tax at your request, with information to be provided by your health insurance professionals
HEALTH INSURANCE EXCHANGES FOR EMPLOYERS
As you may know, the health care law – the Patient Protection and Affordable Care Act (PPACA) – requires most individuals (including children and other dependents) to carry health insurance, beginning January 1, 2014. The law also requires the establishment of a health insurance exchange in all states by October 1, 2013. The goal is that exchanges, working with private insurers, will act as a marketplace and provide “one-stop shopping” for individuals and families who may need health insurance or who seek less expensive coverage. A companion program – the Small Business Health Options Program or SHOP Exchange – will assist small businesses that want to offer insurance to their employees.
PPACA amended the Fair Labor Standards Act (FLSA) to require that employers provide each employee with notice about the exchanges. The notice requirement applies to employers that have at least $500,000 in annual revenue and employ one or more employees who are engaged in commerce. The notice requirement also applies to hospitals, schools, and government agencies. If an employer controls multiple entities, that when combined meet the requirements, then each entity is considered to be a qualifying employer.
Employers must provide notice to their existing employees by October 1, 2013, and must provide notice to new employees hired on or after October 1, 2013. Each employee must receive notice, regardless of the employee’s health plan enrollment status and part- or full-time employment status. Notice may be provided in writing or electronically under the Department of Labor’s electronic disclosure rules.
The notice must inform the employee:
- Of the existence of the exchange, the services provided by the exchange, and contact information for the exchange.
- That he or she may be eligible for a premium tax credit under the Internal Revenue Code if (a) the employer pays less than 60 percent of the cost of health insurance offered by the employee; and (b) the employee purchases health insurance through the exchange.
- That an employee who purchases health insurance through an exchange may lose the employer’s (tax-free) contribution to the cost of health insurance offered by the employer.
To satisfy this notice requirement, the Department of Labor has provided model notices on its website, at www.dol.gov/ebsa/healthreform. The website provides one model for employers who offer a health plan to some or all of their employees, and another model for employers who do not offer a health plan. Employers may modify the notice, as long as it meets the content requirements described above. Printouts of these notices are contained in the 2 PDFs below. Completion of Part B through item 12 is required. Completion of page 3, items #13 through 16 for employers who do offer health coverage, is optional. Should you choose to provide this information please contact your Insurance Provider for details.
If you have questions about this requirement or want help to comply with the requirement, please contact Steven Bortnick at 973-530-9113 firstname.lastname@example.org or Toni Klimowicz 973-530-9131 email@example.com.Form for Employers who offer health coverage Form for Employers who do not offer health coverage
On July 2, The Obama administration decided to postpone the employer responsibility payment and insurance reporting requirements under the Affordable Care Act for one year to give businesses more time to comply with the health care reform law. The requirements will instead begin in January 2015 for employers with 50 or more full-time employees (or the equivalent in full- and part-time employees) to offer quality affordable health insurance to employees or face a $2,000 fine per employee if the employee receives a premium tax credit for purchasing individual coverage on one of the upcoming health insurance exchanges.
The Department of the Treasury announced the delay along with a similar delay for information reporting by employers, health insurance issuers and self-funded plan sponsors.
For more information contact Steven Bortnick, Partner 973-530-9113 or Sbortnick@bederson.com
New Jersey—Income Tax: Senate Passes New Jobs Credit Bill
The New Jersey Assembly has passed a bill that, if enacted, would create a refundable New Jobs for New Jersey tax credit against the corporation business tax or the gross (personal) income tax for an employer of 100 or fewer full-time employees. To be eligible, the employer would have to hire an eligible individual after April 1, 2013, who was not previously employed by the employer, and did not have full-time employment for 30 or more days prior to being hired by the employer. The employee would have to work full-time (at least 35 hours a week) during the year for which the credit is provided. Also, the employer would have to employ an average total number of full-time employees during the tax year for which the tax credit is provided that exceeds the average total number of full-time employees employed by the employer during the 12-month period immediately before April 1, 2013.
The amount of the credit would be equal to the total amount of the employer’s payroll taxes paid during the tax year with respect to that individual. Employer payroll taxes would include the portion paid by employers of state unemployment, temporary disability, and work force development and basic skills assessments, and federal Social Security, Medicare, and unemployment taxes.
An employer would be able to apply and qualify for a tax credit with respect to tax years beginning in calendar year 2013, 2014, or 2015. If the employer’s application is approved for any of those three years, the employer would be able to continue to receive the tax credit for any of the four tax years following the tax year during which the employer met the requirements of the bill.
The bill has now gone to Gov. Chris Christie for his approval. S.B. 2211, passed by the New Jersey Assembly, February 14, 2013