Mar 22, 2023
Most Employers Now Required to File Electronic Information Returns Beginning in 2024
On February 21, 2023, the IRS released Final Rules amending the existing requirements related to mandatory e-filing of information returns. This now includes Forms 1094-C and 1095-C, among others.
Organizations filing 10 or more IRS returns of any kind will need to file almost all required returns electronically.
The final rules are effective for all applicable returns due on or after January 1, 2024. This article specifically addresses the changes applicable to Forms 1094 and 1095, which must be filed by applicable large employers (ALEs) as well as non-ALEs that sponsor self-funded health plans.
Under the final rules, employers filing 10 or more returns must file Forms 1094 and 1095 (and their other applicable returns) electronically. The 10-form threshold is determined based on the total number of forms the employer must file with the IRS, including the Forms 1094 and 1095, as well as other information returns, such as Forms W-2 and Forms 1099, income tax returns, excise tax returns, and employment tax returns, including those that are not required to be e-filed, such as forms 940 and 941.
Previously, employers filing less than 250 of the same ACA reporting forms were allowed to choose whether to file their applicable Forms 1094 and 1095 (either the B or C forms, as applicable) by paper or electronically.
The final rules do allow employers to seek a waiver in cases of undue hardship. Per the final rules, one justification for the waiver is determined if hardship exists because the cost for filing the returns electronically exceeds the cost of filing the return on paper.
Entities seeking a waiver must specify:
- the type of filing to which the waiver applies
- the period to which it applies, and
- the entity must follow any applicable procedures, publications, forms, instructions, or other guidance, including postings to the IRS.gov website, when requesting the waiver.
Click here for the IRS Application for a Waiver from Electronic Filing of Information Returns. Instructions are on Page 2.
