Thursday, August 4, 2016

IRS Issues Draft Instructions for Forms 1094-C and 1095-C for 2016

IRS Issues Draft Instructions for Forms 1094-C and 1095-C for 2016   

August 4, 2016

By Larry Grudzien,, 708-717-9683

On August 1, 2016, IRS released draft instructions for Forms 1094-C and 1095-C for 2016. The following is an overview of important changes to the forms:

Form 1094-C

On line 22, box B is designated "Reserved." The Qualifying Offer Method Transition Relief is not applicable for 2016.

In Part III, column (b), "Section 4980H" was inserted before "Full-Time Employee Count for ALE Member" to remind filers that the Code Section 4980H definition of "full-time employee" applies for purposes of this column, not any other definition that an ALE Member may use for other purposes.

Form 1095-C:

The language "Do not attach to your tax return. Keep for your records." was inserted under the title of the form to inform the recipient that Form 1095-C should not be submitted with the return.
Changes to codes. Code 1I for line 14, and Code 2I for line 16, are no longer applicable and have been reserved.

New codes 1J and 1K have been added for line 14. These codes are used to reflect conditional offers of coverage to an employee's spouse. A conditional offer is an offer of coverage that is subject to one or more reasonable, objective conditions (for example, an offer to cover an employee's spouse only if the spouse is not eligible for coverage under a group health plan sponsored by another employer.

Multiemployer Plan  Interim Rule Relief:  The use Code 2E for line 14 has been extended to 2016.

Form 1094-C and Form 1095-C:

Transition relief. Several forms of transition relief were available to employers for 2015 under Code Sections 4980H and 6056, but only limited transition relief continues to apply in 2016. References to transition relief that applied only in calendar year 2015 have been removed. Descriptions of the remaining forms of transition relief have been amended to clarify for which months in 2016 the transition relief applies.

New Definition: The term "Employee Required Contribution" has been added.  This  term refers to the employee's share of the monthly cost for the lowest cost self-only minimum essential coverage providing minimum value that is offered to the employee by the ALE Member.

For a copy of the instructions, please click on the link below:

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