Modified ACA Reporting Extension & Overtime Update

The IRS recently announced it will be extending the ACA reporting deadline to provide employee statements from its original date of January 31, 2017 to March 2, 2017. This means that you will no longer need to apply for a 30-day extension - here's what you need to know.

Although the extensions are not as generous as last year and not every deadline with respect to ACA reporting has been extended, the good news is as follows:

• The IRS has just announced in Notice 2016-70 that the ACA reporting deadline to provide employee statements by Tuesday, January 31, 2017 has been extended 30 days to Thursday, March 2, 2017  - meaning applying for a 30-day extension is no longer necessary. This comes as a welcomed relief for those employers who were not as far along as they had hoped as it related to this year’s earlier ACA reporting deadline.  

• The good faith transition relief as it relates to the imposition of penalties is also being extended one year. Thus, transition relief from penalties under sections 6721 and 6722 to reporting entities that can show that they made good-faith efforts to comply with the information-reporting requirements will remain for 2016.

Forms 1095-B and 1095-C

Because of the extension granted under this notice, some individual taxpayers may not receive a Form 1095-B or Form 1095-C by the time they are ready to file their 2016 tax return. Similar to last year, taxpayers may rely on other information received from their employer or other coverage provider for purposes of filing their returns, including determining eligibility for the premium tax credit and confirming that they had minimum essential coverage. Taxpayers do not need to wait to receive Forms 1095-B and 1095-C before filing their returns. Individuals need not send the information relied upon to the Service when filing their returns but should keep it with their tax records.

However, it is important to note that the employer ACA reporting deadlines to provide forms to the IRS are not extended. Those deadlines remain Tuesday, February 28, 2017, if filing on paper - or Friday, March 31, 2017, if filing electronically.  A 30-day extension can be requested via Form 8809.

Overtime Rules Litigation

Brace yourself for Tuesday’s results!! (No, I am not referring to Election Day... that is over and done with.) As you know, I have written a couple of articles on the new overtime laws that are to take effect on December 1, 2016. I also subsequently reported on the two lawsuits filed in a Texas federal court to stop, repeal, or modify these new regulations.

Revised overtime regulations are still scheduled to take effect on December 1, 2016, but the litigation has intensified.  On Wednesday, November 16, Judge Amos L. Mazzant, the federal judge for the Eastern District of Texas, held a hearing on a preliminary injunction motion seeking to stop the revised regulations from taking effect nationwide. After heated debate from both sides, Judge Mazzant stated at the end of today’s hearing that he is taking the matter under consideration. He further indicated that he intends to rule on the preliminary injunction motion by Tuesday, November 22, 2016.

What this means is that this matter will go down right to the wire as to whether it takes effect on December 1^st.  You should have a plan in place to implement on December 1^st if you have not already taken measures to comply with this new law.  We will provide a further update after the judge issues his decision.