1095-C Deadline

Navigating the intricacies of tax compliance can often seem daunting for businesses, and among the myriad forms, Form 1095-C stands out due to its significance under the Affordable Care Act (ACA). Specifically intended for Applicable Large Employers (ALEs), this form serves as a report on the health insurance coverage offered to full-time employees.

Whether you're a seasoned HR professional or a business owner getting acquainted with this obligation, understanding the requirements, critical deadlines, and potential penalties associated with Form 1095-C is pivotal to ensuring your company's adherence to federal mandates. We delve deep into the nuances of Form 1095-C filing, providing a comprehensive guide to mastering this essential aspect of business taxation.

Form 1095-C compliance requirements

The Affordable Care Act (ACA) classifies employers with 50 or more full‑time and full‑time‑equivalent employees as Applicable Large Employers (ALEs). These employers must offer minimum essential coverage (MEC) to at least 95 percent of their full‑time workforce.

To satisfy ACA requirements, ALEs must distribute and file Form 1095‑C by the applicable IRS deadlines. Failure to do so can trigger substantial penalties.

What is form 1095-C?

Form 1095‑C is the annual statement Applicable Large Employers (ALEs)—those with at least 50 full‑time and full‑time‑equivalent employees—must furnish to each full‑time worker. It confirms whether the employer offered affordable, minimum essential coverage during every month of the calendar year, as required by the Affordable Care Act. Individuals do not send Form 1095‑C to the IRS with their tax return, but they should keep it for reference when determining eligibility for the Premium Tax Credit or verifying health‑coverage information.

The form is divided into three parts:

• Part I – Employee and Employer Information
  Captures basic details for both parties, including name, Taxpayer Identification Number (TIN), address, and a contact phone number.
• Part II – Offer of Coverage
  Describes the employee’s health‑plan offer on a month‑by‑month basis:
  • Plan start month
  • Line 14 – Series 1 code indicating the type of coverage offered
  • Line 15 – Employee’s required contribution for the lowest‑cost self‑only plan
  • Line 16 – Series 2 safe‑harbor code (if applicable) explaining why a penalty may not apply
  • Line 17 – ZIP code used for work‑site affordability safe harbor (if applicable)
• Part III – Covered Individuals
  Lists each person (employee, spouse, dependents) enrolled in the employer’s self‑insured plan, along with their TINs and the months they were covered.
  Note: Employers that provide only fully insured coverage complete this section only if they also maintain a self‑funded option.

Employers must also transmit every 1095‑C to the IRS—along with summary Form 1094‑C—and furnish copies to employees by the annual deadline (Monday, March 3^rd, 2025 when delivered electronically). Timely, accurate filing helps avoid shared‑responsibility penalties and gives employees a clear record of the coverage available to them.

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What are the 1095-C deadlines?

There are specific Form 1095-C deadlines that ALEs must adhere to each year.

ALEs are required to distribute copies of Form 1095-C to applicable employees by Monday, March 3^rd, 2025. The forms will give each employee more information about the type of insurance that was offered during the previous year.

ALEs are also required to submit the 1095-C forms to the IRS. There are two different methods for IRS submission: paper filing and electronic filing, also known as e-filing.

If an employer chooses to submit a paper filing, then the Form 1095-C Deadline is Friday, February 28^th, 2025. However, if they choose to e-file, then the deadline is Monday, March 31^st, 2025. Employers must include the summary form, Form 1094-C along with their filing. It's important to note that an electronic filing is required if the employer has more than 10 forms to submit.

Meeting these deadlines is crucial, as non-compliance can result in penalties for the employer.

What are the 1095-C penalties?

There are Form 1095-C penalties for ALEs who fail to comply with its reporting requirements. If an ALE doesn't provide accurate forms to their employees or doesn't file them correctly with the IRS by the specified deadlines, they may face penalties. These penalties are as follows:

• Failure to file (or failure to file correct forms) - $330 per form
• Failure to distribute recipient copies - $330 per form
• Failure to file electronically if required - $330 per form

Please note that penalties may be greater if there is intentional disregard of the Form 1095-C filing and furnishing requirements. Employers who can prove that any non-compliance was due to reasonable cause and not willful neglect may be eligible for penalty relief.

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How can I avoid late filing penalties?

The IRS can assess substantial penalties if Applicable Large Employers (ALEs) file Form 1095‑C—or the related Form 1094‑C—after the deadline or fail to furnish employee copies on time. A disciplined, year‑round process is the best defense.

• Map out every key date. Add the current IRS due dates to a shared compliance calendar: employee statements (Monday, March 3^rd, 2025), electronic filing via AIR (Monday, March 31^st, 2025), and correction windows. 
• Maintain clean data all year. Track hires, terminations, and coverage changes monthly. Validate Social Security numbers/TINs against the SSA’s Business Services Online (BSO) to reduce error notices.
• E‑file whenever possible. The IRS now requires electronic submission if you file ten or more information returns in aggregate (Forms W‑2, 1099, 1095, etc.). Using an IRS‑approved e‑file service provides immediate proof of receipt and reduces mail‑processing delays.
• Request extra time if needed. If you foresee processing bottlenecks, file Form 8809 no later than the original filing deadline for an automatic 30‑day extension (and apply for an additional 30 days if hardship persists).
• Monitor regulatory updates. Subscribe to IRS and Department of Treasury bulletins so you can adjust quickly to changes in affordability thresholds, electronic‑filing thresholds, or XML schema updates.
• Leverage specialized software or advisors. Dedicated ACA‑reporting platforms and experienced payroll or tax professionals can flag data anomalies, perform code validations, and generate correction files before transmittal.
• File early—and correct promptly. Submitting well before the deadline leaves a cushion to fix any AIR rejections. If you discover an error after filing, transmit a corrected Form 1095‑C right away to limit potential penalties.

Penalties for late filing can reach up to $310 per form for 2025 (indexed annually), with higher amounts for intentional disregard. Proactive planning, accurate data, and timely e‑filing are the simplest ways to avoid those costs.

Conclusion

In the landscape of business taxation, Form 1095-C plays a pivotal role, ensuring that ALEs are transparent about the health coverage they offer in alignment with the ACA. Navigating its requirements, being vigilant about deadlines, and steering clear of potential penalties are more than just regulatory compliances—they reflect an employer's commitment to the well-being of their workforce.

Mastering the nuances of Form 1095-C filing is not only a testament to diligent financial management but also a step forward in fostering trust and clarity between employers and their valued employees.