As the deadline for Affordable Care Act (ACA) reporting approaches, it’s critical for employers to ensure they are fully compliant with both New Jersey and federal 1094/1095 reporting requirements. This process is essential not only for meeting regulatory obligations but also for ensuring that employees receive their correct forms in a timely manner.
For employers based in New Jersey, or those who employ individuals residing in New Jersey or have dependents residing in the state, understanding the nuances of both New Jersey and federal filing is key to avoiding penalties and ensuring smooth reporting.
Federal Reporting Requirements
- Electronic Filing Requirement:
- The IRS mandates electronic filing for any employer or insurer who is submitting 10 or more returns per Employer Identification Number (EIN). This includes forms 1095-C, 1095-B, and W-2s. Therefore, any group with 10 or more of these forms combined must file electronically.
- Form Distribution:
- Forms 1095-C or 1095-B must be distributed to employees by March 3, 2025. It’s important to remember that the distribution must occur via mail; simply uploading the forms to an employee portal is not sufficient. This ensures that employees receive their forms in a timely manner for tax filing.
- Filing Deadlines:
- The deadline for submitting forms to both the IRS (federal government) and the New Jersey Division of Taxation is March 31, 2025. This applies to electronic filing of forms 1094-C, 1095-C, and other ACA-related forms. Keep in mind that these deadlines are not flexible, and failure to meet them can result in penalties.
- Accuracy:
- Ensure that all information on the forms is accurate. Mistakes or incomplete forms may delay filing and result in penalties. Pay special attention to employee information, coverage details, and months of coverage.
New Jersey-Specific Reporting Requirements
- New Jersey Health Insurance Mandate:
- New Jersey has its own state-level health insurance mandate that requires New Jersey residents to have health insurance or face a penalty. Employers are required to submit 1095 forms for employees who are residents of New Jersey or for employees whose dependents reside in New Jersey.
- Form 1095 Distribution:
- As with federal requirements, New Jersey law also requires the distribution of forms 1095 to employees by March 3, 2025. This ensures employees in New Jersey are in compliance with both state and federal healthcare reporting laws.
- Electronic Filing for New Jersey:
- Like the federal reporting, New Jersey mandates that employers submit these forms electronically. The filing due date to the New Jersey Division of Taxation is March 31, 2025, aligning with the federal deadline.
- Penalties for Non-Compliance:
- Employers who fail to comply with the state-level health insurance mandate could be subject to penalties. Ensure timely filing and distribution of 1095 forms to avoid fines.
Reporting Guide for Employers
Here’s a step-by-step guide to help ensure compliance with both New Jersey and federal 1094/1095 reporting requirements:
- Step 1: Prepare Employee Information
- Gather all necessary employee data, including health insurance coverage details, dependents’ information, and residency status.
- Step 2: Verify Eligibility and Coverage
- Review each employee’s coverage throughout the year. Ensure you accurately report whether each employee, including their dependents, had coverage for each month of the year.
- Step 3: Distribute Forms
- Mail forms 1095-C or 1095-B to employees by March 3, 2025. Remember to physically mail these forms—posting them on an online portal does not meet the requirement.
- Step 4: File Electronically
- Submit forms 1094-C, 1095-C, and any applicable related forms to both the IRS and New Jersey Division of Taxation by March 31, 2025. You must file electronically if you have 10 or more returns.
- Step 5: Maintain Records
- Keep copies of the filed forms and distribution confirmations for your records. The IRS and state authorities may request verification of compliance, and keeping thorough records will help in case of an audit.
- Step 6: Seek Professional Guidance
- If you are unsure about any part of the reporting process or require assistance with filing, consider consulting a tax professional or legal expert specializing in ACA compliance.
By following these important steps and deadlines, you can ensure that your business is compliant with both New Jersey and federal reporting requirements, avoiding penalties and contributing to your employees’ smooth tax filing experience.
Stay ahead of the deadlines, and prepare now to ensure compliance in 2025!
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