California ACA Form 1095-B/C Reporting Requirements for the 2023 Tax Year- A Complete Guide
Understanding the 1095-B/C reporting requirements is critical to ensuring ACA compliance with individual-mandated states.
The ACA 1095 State filing requirements specifically pertain to health coverage information reporting, aiming to provide accurate data for assessing compliance with individual and employer mandates. Whether you are an employer, insurer, or an individual taxpayer, understanding and adhering to these filing obligations is paramount to avoid penalties and ensure the seamless flow of information between stakeholders.
As the healthcare industry undergoes continual transformations, compliance with the Affordable Care Act (ACA) remains crucial for individuals and businesses. After the ACA Congress eliminated federal individual mandates, several states, including Rhode Island, Massachusetts, California, New Jersey, and the District of Columbia, started enforcing the individual mandate at the state level. California ACA 1095 State filing requirements are covered in detail in this blog.
ACA 1095 State Filing Requirements in California
California mandates that employers and other entities that provide Minimum Essential Coverage (MEC) to individual California residents must file Form 1095-B/C with the state and distribute a copy to the corresponding recipient. In addition to 1095 filing, the State of California requires employers and insurers to file a transmittal Form 1094.
California Form 1095-B Filing Requirements
The entities offering minimal essential coverage (MEC) to individual Californians in a calendar year must report a copy of IRS Form 1095-B detailing the coverage details. Under Section 61005 of the California Revenue and Taxation Code (R&TC), the entities can submit to the FTB the same federal forms 1095-B that they submit to the IRS. Employers, government agencies, and health insurance issuers and carriers are among the entities.
It’s very simple to File 1095-B. The Issuer should report only their business, individual basic details, and the covered individual details for some or all months during the year on Form 1095-B.
California Form 1095-C Filing Requirements
According to California legislation, employers that employ 50 or more people full-time employees, known as Applicable Large Employers, must submit a 1095-C form to the FTB each year to disclose the health coverage details of their California-resident employees. Revenue and Tax Code (R&TC) Section 61005 permits the FTB to receive the identical federal Form 1095-C that the employer sends to the IRS.
File 1095-C to report business, & employee basic details, employee coverage, and contribution details, which helps the IRS determine whether the employer offers their employees affordable or minimum essential coverage.
Important Deadlines and Penalties for 1095 Form Filing in California
Deadline for California 1095 forms
- The deadline to distribute copies of Form 1095-B/C to recipients is January 31, 2024.
- The deadline to file Form 1094 & 1095-B/C with the State of California is April 1, 2024.
Penalties for 1095 Form
The penalties for the 1095 form are imposed as follows:
- Failing to comply with the ACA reporting requirements of the state of California will be subject to the general information reporting penalty provisions for failure to file correct information returns.
- The penalty for filing a 1095 form with incorrect information for the 2023 tax year is $50 per individual, included on the return for which the failure occurs.
Note: The Federal Forms 1094 and 1095 forms filed to the FTB on or before May 31 will not be penalized. Furthermore, there will be no fines for not distributing recipient copies by January 31.
How do I file an ACA 1095 form with California?
The entities can file 1095 forms with the state of California either electronically or by paper.
Taxpayers filing 250 or more returns must file electronically for faster processing and increasing accuracy. This requirement applies to all filed forms, both original and corrected forms, on an individual basis.
However, the FTB encourages entities to file electronically even if they file fewer than 250 returns.
If the entities choose to paper file ACA forms, they can mail the forms to the following address:
HEALTH CARE MANDATE,
FRANCHISE TAX BOARD,
PO BOX 2288,
RANCHO CORDOVA CA 95741–2288.
Use TaxBandits, an IRS-authorized e-file provider that offers a range of features, including Federal and State filing and recipient copy delivery via postal mail or online, for a smooth filing experience with ACA 1095 forms.
Conclusion:
Following deadlines and paying close attention to details are essential while navigating California’s ACA 1095 state filing requirements. Businesses may ensure compliance and efficient tax procedures with the appropriate strategy.
