1099s, W-2s and ACA Forms: New Tax Season, New Priorities for Fast, Fully Compliant Filing

Does the lower e-file threshold impact 1099s, W-2s, and 1095s?

I am assuming this is referring to the Taxpayer First Act and the thresholds that will be lowered over the next three years. So yes, it does apply to 1099s, W-2s and ACA forms, which are the 1095s. And again, just to review these numbers, for this upcoming tax season companies filing 250 or more forms must e-file, in 2021 – for tax season 2020 – companies filing 100 or more forms must e-file and in 2022 – for tax season 2021 – companies filing just 10 or more forms must e-file

Is the 250 or more forms threshold for only active employees you have at end of the year or active and terminated employees at the end of the year?

The threshold is for all the forms that you need to file for the tax year. For example, if you started tax season 2019 on Jan. 1 at 256 employees and by Dec. 31, 2019, only have 245 employees, you still have to file for those other employees that made earnings in your business for 2019. I know it can get confusing, so I hope the example helped.

But basically, it doesn’t matter if someone was terminated during the year, if they made earnings in your company as an employee, you must file a W-2 for them and that would count toward the threshold.

Can Employers with under 250 E-file?

Great question! And the answer here is absolutely! All employers are actually encouraged to e-file regardless of the number of filings they have. The IRS only makes it mandatory for those that meet the 250 threshold right now. However, there are many benefits to e-filing and I talked about in the first question, in the next couple years, almost all businesses will be required to e-file, since the threshold will be lowered to 10 filings. With that being said, this is a great time, to start the transition of moving from paper to e-filing if you haven’t already done so, that way you have the process down and you know you’ll be ready and compliant if your business becomes required to e-file within the next couple years.

Aren't the only businesses required to report and follow ACA is if you have 50+ employees?

That is correct, if you are an ALE, which is an Applicable Large Employer and have 50+ employers, which are your FT and FTE (Full-time Equivalent employees), then you must comply with all ACA laws and regulations when it comes to offering affordable health insurance to your employees, but also with the reporting component of the law as well.

When are the new 2019 1095-C forms coming out? And when are 1095-c due to employees?

That is a great question as it is already almost December and the IRS has not yet released the official versions of the 2019 1095s or 1094 ACA forms and transmittals. While this is particularly late, the IRS did release the 2019 drafts of the forms and transmittals last Thursday, November 14 – so we are expecting and watching closely for the official forms to be released any time now.

However, just because the forms have not been released, doesn’t mean you shouldn’t still prepare. The deadlines to file will still remain 3/31 if you are e-filing to the IRS, 2/28 if you are paper filing to the IRS and 1/31 to furnish copies to your employees. And we all know that January is right around the corner, so you need to be prepared for that deadline.

You only file a 1095C if you offer your employee ACA health coverage, not if you offer a different health insurance prog. ie. BCBS, correct?

That is actually not correct, if you are an ALE, you need to offer MEC to your employees and it can be from any health insurance provider, does not have to be from the marketplace.

Do we have to mail a paper form to recipients, unless they consent to receive it electronically?

This is tricky, but yes. Using a service to provide 1099s and W-2s to your recipients and employees is a great way to ease the process and ensure delivery. However, it is imperative that the recipient/employee consent to receiving it that way. If they do not, it is your responsibility to then mail a paper copy to them. If you do not, you will not have satisfied this filing requirement. Efile4biz.com is a great website to utilize this feature because it allows you to see a grid of who you sent emails to, to provide consent and whether they did or not. This way, if they didn’t you can then utilize the print and mail option to make sure you remain compliant.

Any recommendations for an e-filing site?

And efile4biz.com is a highly recommended site because it is an IRS authorized e-filer, it is SOC 2 certified for mailing and printing recipient and employee forms, and it is also HIPAA compliant to handle filing ACA forms.

Again, the site is efile, the number 4, then b – I – z .com to check it out, you can create an account for free and see how easy it is to use. And the great thing about it, there is no minimum to file, you only pay for what you file.

As an employer, we don’t have to provide or keep record of more than 4 years of tax forms?

The answer here is yes, but I want to clarify, that this is not referring to just any tax forms, but specifically information returns, like 1099s and W-2s. The IRS only requires that you keep the last four years on record. And when you e-file, this makes it that much easier because the site should maintain those files, keeping you from having to stockpile all that paper in your office.

It also makes it easier to supply copies to recipients and/or employees that come back asking for a previous year's form. And of course, I will add that efile4biz.com, does keep 4 years' worth of filings.

What happens if you get a returned W-2? What are our responsibilities as a business?

This is actually a great question to end on. Remember it is your responsibility as the employer to furnish the forms to the recipient, so that means you should be making sure that your records are kept up-to-date with accurate addresses and such. However, if you do receive a returned W-2, the best thing to do is contact the recipient to get an updated address, so you can resend it. And you will want to do this as soon as possible, especially if it is after the deadline. Now, I know what the next question would be, so I will go ahead and answer it – what if I can’t get a hold of them?

Well – this is where you will want to reach out to the IRS to just make sure that you protect your company and show good faith effort in trying to comply.

But of course, as I mentioned just a moment ago, this is why recordkeeping and keeping your files up-to-date and accurate is so important.

And this is also why it’s a good time to start now, reviewing all your employee and/or recipient files for whom you need to file for, so you can make sure you have all the updated information, and if not, you still have time to get it, before it’s too late.