Are 1095s still required?
In the realm of tax compliance, the 1095 form has long been a staple for employers and employees alike. Introduced by the Affordable Care Act (ACA), the 1095 form is used to report health coverage information to the IRS. However, with the changing landscape of healthcare and tax laws, many are left wondering: Are 1095s still required?
The short answer is yes, 1095s are still required for the 2023 tax year. These forms are essential for individuals to determine their eligibility for tax credits and for employers to demonstrate compliance with the ACA’s employer shared responsibility provisions. Despite some changes and exemptions, the 1095 form remains a crucial document in the tax compliance process.
The 1095 form comes in two versions: 1095-B and 1095-C. The 1095-B is provided to individuals who obtained health insurance through a government exchange or a qualified health plan, while the 1095-C is given to employees by their employers. Both forms contain important information about the individual’s health coverage, such as the type of coverage, the months of coverage, and the premium amount.
While the 1095 forms are still required, there have been some changes and exemptions that impact their use. For instance, the IRS has implemented a simplified reporting process for certain small employers and self-insured employers. Additionally, certain individuals who received coverage through a government exchange or a Medicaid program may not receive a 1095 form at all.
Moreover, the IRS has granted some relief for employers who have faced challenges in providing 1095 forms due to COVID-19. For the 2020 and 2021 tax years, employers were granted an extension to provide 1095 forms to employees by March 2, 2022. This extension was extended to March 2, 2023, for the 2022 tax year.
Despite these changes and exemptions, the underlying requirement for employers to provide 1095 forms remains. As such, it is crucial for employers to ensure they are in compliance with the applicable rules and regulations to avoid potential penalties and interest.
In conclusion, while there have been some adjustments and exemptions, 1095s are still required for the 2023 tax year. Employers and individuals alike must be aware of the changes and take the necessary steps to comply with the tax laws. As the healthcare and tax landscapes continue to evolve, staying informed and up-to-date with the latest requirements is essential for maintaining compliance and avoiding potential penalties.
