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2021 Tax Year 1095-C Draft Released With New Codes

Hello again,

This post is for Applicable Large Employers (ALEs) required to comply with the Affordable Care Act. We hope you find it useful.

For those interested in getting a head start on familiarizing themselves with the forthcoming changes to the 2021 tax year 1095-C forms, the IRS recently released a draft with instructions for new codes.

The two new codes are available for use on Line 14 of the Form 1095-C are 1T and 1U.

It’s important to note that draft forms are early release versions and not to be filed as they may change again before the final versions are published.

New Codes

1T and 1U are new 1095-C codes that involve a Health Reimbursement Arrangement (HRA) offer of coverage by the employer.

The IRS defines an HRA as a type of account-based health plan that employers can use to reimburse employees for their medical expenses.

According to the IRS, 1T is applicable when “individual coverage HRA [was] offered to employee and spouse (no dependents) with affordability determined using employee’s primary residence ZIP code.

1U [is used for] individual coverage HRA offered to employee and spouse (no dependents) using employee’s primary employment site ZIP code affordability safe harbor.”

These codes exclude dependents as recipients of the HRA coverage extended.

Line 14 codes 1V, 1W, 1X, 1Y, and 1Z, are new and are reserved for future use, possibly on a forthcoming draft version.

This material was partially sourced from the ACA Times, and a link to the early release draft pdf can be found there.

Missing Information Return Form 1094/1095-C

Letter 5699, Missing Information Return Form 1094/1095-C, is a warning notification for employers that have failed to file forms 1094-C or 1095-C for a prior tax year. This letter is now being issued for the 2019 tax year.

Employers must respond within 30 days of the date on the letter. Responding accurately with the requisite documentation is crucial for avoiding penalties.

If you have received a warning letter, penalty notification, or need help with any ACA-related compliance or filing information, Passport Software can help.

Our friendly experts are knowledgeable and can help you respond effectively to a warning letter or penalty notification.

And, our affordable, easy-to-use ACA Software and Services can ease the burden of compliance and reporting.

Call 800-969-7900 to learn more. Or, contact us – we are here to help.

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