Last year, the IRS finalized rules requiring all employers filing ten (10) or more returns to make those filing electronically, via the IRS’ e-File system. The 10-form threshold is determined based on the total number of forms the employer is required to file with the IRS, 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. This also includes IRS Forms 1094 and 1095. Previously, employers who filed 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 IRS has information on this requirement on its Filing Information Returns Electronically (or “FIRE”) website which can be found here: https://www.irs.gov/e-file-providers/filing-information-returns-electronically-fire.
- IRS Forms 1094 and 1095 must be filed via the Affordable Care Act Information Returns (AIR) system found here: https://www.irs.gov/e-file-providers/affordable-care-act-information-returns-air.
The IRS’ final rules do allow employers to seek a waiver in cases of undue hardship. A key consideration in determining whether hardship exists is whether 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. The application for a waiver can be found on the IRS’ FIRE website.