ACA Form 1095 - B & C Penalties for 2024
ACA Form 1095 Penalties - An Overview
Updated on October 10, 2024 - 03:00 pm by Admin, TaxBandits
Under the Affordable Care Act (ACA), the Applicable Large Employer (ALE) with at least 50 full-time equivalent employees in the previous calendar year must meet the ACA reporting requirements every year.
Failure to do so may result in a proposed penalty from the IRS of up to a million dollars.
The following is a general overview of the penalties that may apply if an ALE fails to meet the ACA 1095 Reporting Requirements.
Table of Content:
- Instructions on How to Fill Out Form 1095-C
- IRS penalties for failing to comply with the reporting requirements
- Penalties for not meeting the ACA Employer Mandate
- Are you facing ACA penalties from the IRS?
- How to Avoid IRS Penalties and Interest?
- Get Started with TaxBandits to avoid ACA penalties from the IRS!
1. The Reasons Why Employers Receive Penalties From the IRS
Employers may receive ACA penalties from the IRS for the following two reasons
-
Failure to comply with IRS reporting requirements (under Sections 6055 and 6056)
- Failure to file IRS forms on time
- Failure to provide copies of ACA form to their covered employees on time
- Filing forms with Errors.
-
Failure to meet the ACA Employer Mandate (under Section 4980H (a) and (b))
- Failure to provide minimum essential coverage to 95% of their full-time employees every month of the calendar year.
- Failure to provide affordable coverage to their full-time or full-time equivalent employees.
2. IRS Penalties for Failing to Comply With the Reporting Requirements
According to IRS Sections 6721 and 6722, the IRS may impose penalties on employers for non-compliance with the Affordable Care Act are as follows.
Large Businesses with gross receipts exceeding $5 million:
| Date that returns filed/furnished | Filing the correct ACA forms within 30 days after the due date | File between 30 days after the due date and August 1 | Filing on or after August 1 | Intentionally neglecting to file |
|---|---|---|---|---|
| From 01-01-2025 thru 12-31-2025 | $60 per return or statement Maximum - $664,500 | $130 per return or statement Maximum - $1,993,500 | $330 per return or statement Maximum - $3,987,000 | $630 per return or statement - No limitation |
| From 01-01-2024 thru 12-31-2024 | $60 per return or statement Maximum - $630,500 | $120 per return or statement Maximum - $1,891,500 | $310 per return or statement Maximum - $3,783,000 | $630 per return or statement - No limitation |
| From 01-01-2023 thru 12-31-2023 | $50 per return or statement Maximum - $588,500 | $110 per return or statement Maximum - $1,766,000 | $290 per return or statement Maximum - $3,532,500 | $580 per return or statement - No limitation |
| From 01-01-2022 thru 12-31-2022 | $50 per return or statement $199,500* maximum | $110* per return or statement - $571,000* maximum | $290* per return or statement - $1,142,000* maximum | $570* per return or statement - No limitation |
| Due 01-01-2021 thru 12-31-2021 | $50 per return or statement - $194,500* maximum | $110* per return or statement - $565,000* maximum | $270* per return or statement - $1,113,000* maximum | $550* per return or statement - No limitation |
| From 01-01-2020 thru 12-31-2020 | $50 per return or statement $194,500* maximum | $110* per return or statement - $556,500* maximum | $270* per return or statement - $1,113,000* maximum | $550* per return or statement - No limitation |
| Due 01-01-2019 thru 12-31-2019 | $50 per return or statement - $191,000* maximum | $100 per return or statement - $545,500* maximum | $270* per return or statement - $1,091,500* maximum | $540* per return or statement - No limitation |
| Due 01-01-2018 thru 12-31-2018 | $50 per return or statement - $187,500* maximum | $100 per return or statement - $536,000* maximum | $260* per return or statement - $1,072,500* maximum | $530* per return or statement - No limitation |
| Due 01-01-2017 thru 12-31-2017 | $50 per return or statement - $186,000* maximum | $100 per return or statement - $532,000* maximum | $260* per return or statement - $1,064,000* maximum | $530* per return or statement - No limitation |
Small Businesses with Gross Receipts less than or equal to $5 Million
| Date that returns filed/furnished | Filing the correct ACA forms within 30 days after the due date | Filing between 30 days after the due date and August 1 | Filing on or after August 1 | Intentionally neglecting to file |
|---|---|---|---|---|
| From 01-01-2025 thru 12-31-2025 | $60 per return or statement Maximum - $232,500 | $130 per return or statement Maximum - $664,500 | $330 per return or statement Maximum - $1,329,000 | $660 per return or statement - No limitation |
| From 01-01-2024 thru 12-31-2024 | $60 per return or statement Maximum - $220,500 | $120 per return or statement Maximum - $630,500 | $310 per return or statement Maximum - $1,261,000 | $630 / No max |
| From 01-01-2023 thru 12-31-2023 | $50 per return or statement Maximum - $206,000 | $110 per return or statement Maximum - $588,500 | $290 per return or statement Maximum - $1,177,500 | $580 / No max |
| From 01-01-2022 thru 12-31-2022 | $50 per return or statement Maximum - 199,500 | $110 per return or statement Maximum - $571,000 | $280 per return or statement Maximum - $1,142,000 | $570 / No max |
| From 01-01-2021 thru 12-31-2021 | $50 per return or statement Maximum - $197,500 | $110 per return or statement Maximum - $565,000 | $280 per return or statement Maximum - $1,130,500 | $560 / No max |
| Due 01-01-2020 thru 12-31-2020 | $50 per return or statement Maximum - $194,500 | $110 per return or statement Maximum - $556,500 | $270 per return or statement Maximum - $1,113,000 | $550 / No max |
| Due 01-01-2019 thru 12-31-2019 | $50 per return or statement Maximum - $191,000 | $100 per return or statement Maximum - $545,500 | $270 per return or statement Maximum - $1,091,500 | $540 / No max |
| Due 01-01-2018 thru 12-31-2018 | $50 per return or statement Maximum - $187,500 | $100 per return or statement Maximum - $536,000 | $260 per return or statement Maximum - $1,072,500 | $530 / No max |
| Due 01-01-2017 thru 12-31-2017 | $50 per return or statement Maximum - $186,000 | $100 per return or statement Maximum - $532,000 | $260 per return or statement Maximum - $1,064,000 | $530 / No max |
| Due 01-01-2016 thru 12-31-2016 | $50 per return or statement Maximum - $185,000 | $100 per return or statement Maximum - $529,500 | $260 per return or statement Maximum - $1,059,500 | $520 / No max |
| Due 01-01-2011 thru 12-31-2015 | $30 per return or statement Maximum - $75,000 | $60 per return or statement Maximum - $200,000 | $100 per return or statement Maximum - $500,000 | $250 / No max |
Create free account with TaxBandits now and e-file your ACA forms to avoid IRS penalties
3. Penalties For Not Meeting the ACA Employer Mandate
The ALEs failing to meet the ALE Employer Mandate may receive Letter 226J from the IRS stating that they are responsible for an Employer Shared Responsibility Payment (ESRP) under section 4980H.
The penalties are calculated by the IRS based on the Form 1094-C and Form 1095-C information submitted
by employers.
Section 4980H (a)
Employers who fail to offer Minimum Essential Coverage (MEC) to at least 95% of their full-time employees and if any employee receives a Premium Tax Credit (PTC) through the marketplace will receive a penalty from the IRS under section 4980H(a).
Under Section 4980H(a), the penalty rate is $2,970 for tax year 2024. This is an increase from $2,880 in 2023.
Penalties are calculated by subtracting the first 30 full-time employees from the total number of full-time employees. Employer-sponsored plans and other providers of minimum essential coverage are also included in this calculation.
Section 4980H (b)
An employer who offers coverage to their employees but it's unaffordable and does not meet the Minimum Value (MV) or receives the Premium Tax Credit (PTC) for the month is penalized.
Under section 4980H(b), this penalty rate is $4,460 for tax year 2024. This is an increase from $4,320 in 2023.
Here, the penalties are calculated only on the basis of full-time employees who receive the premium tax credit.
Need help Generating ACA Codes?
Contact our Sister product ACAwise today.
ACAwise, a full-service solution provider for ACA forms, will take from generating codes to e-filing them with the IRS and the state and also furnish employee copies on your behalf. Get started Now
4. Are you facing ACA penalties from the IRS?
If so, don’t worry. We help you file on time, every time with our well-experienced ACA professionals. We will help you.
- Analyze the penalty notices
- Respond to the IRS with an acceptable explanation for a late filing
- Save money by avoiding unnecessary penalties
To avoid unwanted penalties from the IRS, get started with TaxBandits now and e-file your Form 1095-C and 1095-B. TaxBandits will automatically generate your 1094-C or 1095-B, if you e-file form 1095-B or 1095-C
with us.
5. How to Avoid IRS Penalties and Interests?
Receiving penalties plus interests from the IRS can be stressful. Here’s how you can save yourself from the risk
of penalties.
- File your ACA forms to the IRS on time.
- File Form 1095-C with the proper information such as TIN, Codes, etc.
- File using correct media. It means if you file a form on paper when you are required to file electronically, you may incur a penalty.
- Offer health insurance coverage that is affordable and provides minimum value to full-time employees.
6. Get Started with TaxBandits to avoid ACA penalties from the IRS!
If your business needs assistance meeting ACA filing deadlines this year, get in touch with TaxBandits. We are an IRS-authorized e-file provider who takes care of everything from e-filing forms with the IRS to employee copy distribution before the due date.
With our well-experienced ACA professionals, we will help you:
- File on time
- Analyze the penalty notices
- Respond to the IRS with an acceptable explanation for a late filing
- Save money by avoiding unnecessary penalties
Our software will also validate your return against the IRS business rules and basic validations to ensures that your forms reach the IRS without errors and the chance of rejection is significantly lower.
File your Form 1095-C electronically before the due date with TaxBandits today!
Success Starts with TaxBandits
The Smart Business Owners Choice
Easy navigation, easy to use and follow. Love web-base platform so no software is required for installation. It’s the selling point, in my opinion.
- Hanh T
Reminds me of upcoming deadlines and auto-calculates the totals as required. Simplifies filling and download of pdf forms.
- Stacey D
Easy and reasonably priced. Great customer service!
- Allen Cohen
I’m quite impressed, especially in comparison with other sites from the IRS list I reviewed as well. Well done. Thank you.
- Igor Mandryka
Very easy to find my way around, most help features are very good, customer service response has been exceptional for the price point.
- Jerry Morris
