The IRS Proposed New E-filing Mandates for Information Returns

How could this affect your future ACA reporting?
IRS Proposes E-filing Mandate

The IRS has been open about the fact that they prefer e-filing over receiving paper forms by mail. They have made this abundantly clear in a new proposal for e-filing requirements. The IRS will most likely finalize the guidelines proposed sometime this fall. 

This information has left many businesses questioning how soon they will need to make a complete shift to e-filing, as the IRS continues to move in this direction.

Here are the highlights of the IRS proposal, and how it may affect your filing requirements moving forward. 

The IRS Proposal for the E-filing Requirement

The current e-file threshold for businesses is 250 forms. This number currently applies to individual forms, for example, you can e-file 249 1095 Forms and 249 W-2s with the IRS. However, this could potentially be changing.

According to this IRS Proposal, that may be changing. Going forward, the IRS would limit businesses to paper-filing a total of 250 forms during a tax year. To put it simply, this would mean that if the business is filing 249 1095 Forms and 249 W-2s, this is a total of 498 forms. Because this crosses the 250 threshold, e-filing would be required for at least half of them. 

What is the Timeline?

So, you may be wondering how soon you need to act. The answer is soon. If finalized by the IRS, this rule would go into effect for deadlines that fall in 2022. This could potentially affect how you file your W-2s and 1099s, but it will absolutely affect your 1095s reporting. 

In addition to adjusting the limit for paper-filed forms, the IRS also plans to lower the requirement dramatically. For the tax year 2022, the IRS would limit businesses to filing a combination of no more than 100 information returns.

Beyond 2022, the IRS would then slash this number from 100 to 10. This would essentially force all businesses to switch from paper filing to solely e-filing. 

How should my business handle future ACA Reporting?

The easiest way to approach future ACA reporting is to be proactive. If paper-filing is your current method of filing, now is the time to explore your options. Finding an ACA reporting provider may be a great way to comply with the IRS and simplify your filing process. 

An ACA reporting provider can help you make the switch to e-filing and they can offer other great benefits that remove the burden of ACA compliance. 

ACAwise offers Industry-leading ACA Reporting Solutions

ACAwise is here to help your organization bridge the gap between paper filing and electronic filing, not to mention we offer great features that don’t exist elsewhere on the market.  We offer two custom services. 

Employers and organizations that have all the information on ACA Codes, but require an e-filing and recipient copy solution are best suited for the Core service.

Employers and organizations that are seeking a complete solution that includes the generation of all ACA codes will benefit greatly from the Elite service. 

Regardless of your organization’s filing needs, ACAwise offers an end-to-end solution. Our clients are able to maintain their IRS compliance without the stress and hassle of handling it alone. We offer our services to ALEs, CPEOs, PEOs, TPAs, and HCM Providers

We use TIN Matching to ensure that your employees’ TINs are correct to eliminate the need to correct this. We also run Data Integrity checks, IRS business rules, IRS Schema validations, IRS XML validations. 

ACAwise even handles state e-filing requirements for organizations that are mandated to file at the state level. 

To learn more about ACAwise and our comprehensive services reach out to our team of experts at [email protected] or give us a call at 704.954.8420!

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