The IRS has proposed two changes to the electronic filing process currently being utilized for Forms 1094-C and 1095-C. The proposed changes would also affect the filing of W-2 and 1099 forms.
If the proposed changes are finalized, all but the very smallest employers will be required to file these forms electronically for due dates in 2022 and beyond.
Currently, employers subject to the ACA’s employer mandate are not required to file Forms 1094-C and 1095-C electronically unless they are submitting at least 250 of those forms to the IRS.
Under this new IRS proposal, the 250 threshold would be reduced to 100 for returns due in 2022 and to 10 for returns due in 2023 or later years. More significantly, the proposed rule would require employers to aggregate the number of different returns it files when determining whether the 250-return threshold is reached. For example, the employer would aggregate ALL W-2, Forms 1095-C, and Forms 1094-C to determine a total amount. If that amount surpasses 250, the forms must be transmitted and filed electronically.
If finalized, this rule will result in almost all employers electronically filing in 2023.