TIN Solicitation and ACA Reporting

Posted by BAS - 04 August, 2016

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Large employers offering health coverage must report that coverage to the IRS and to covered individuals.  The offer of coverage must also be reported to full-time employees.  Reporting is accomplished through Forms 1095 (to the individual) and Form 1094 (to the IRS).

Form 1095-C requires the employer to list the Social Security Number (also known as Taxpayer Identification Number or TIN) of the employee and each covered dependent.  If a TIN has been properly requested but not received, the individuals may be identified by birth date.

Proper request of a TIN requires three separate steps.  First, the employer must initially solicit the TIN when the relationship between the employer and the individual is established (i.e., at date of hire).  If the TIN is not provided, the employer must annually solicit the TIN. The first annual solicitation is generally required by December 31 of the year in which the relationship with the taxpayer begins (January 31 of the following year if the relationship begins in December)  If the TIN still is not provided, a second annual solicitation is required by December 31 of the following year.  The IRS recently released guidance on TIN solicitation accessible here

Employers may be getting fallback from the IRS on their Form 1094-C filings.  In many cases, the IRS has identified errors in employees’ and dependents' TINs. The IRS will not impose penalties if employers can show they made good faith efforts to comply with reporting requirements.  The relief applies to incorrect or incomplete information, including TINs or dates of birth reported on a return or statement.  Employers should make sure that they followed the proper TIN solicitation procedures to obtain correct taxpayer identification numbers to be able to take advantage of penalty relief. 


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