Guest Blog: The 2017 IRS Updates You Need to Know About

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Nelco

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Guest Blog: The 2017 IRS Updates You Need to Know About


Editor's note: Every year brings a few changes and new processes to the central office. We'd like to thank our friends at Nelco for delivering this valuable information to our readers and the Skyward community. 

 

W-2 and 1099-MISC Filing Deadline Changes

Beginning in 2017, for the 2016 reporting year, many important deadlines have changed. Filers will be required to send W-2 and 1099-MISC recipient copies and submit the forms to the SSA/IRS by January 31, 2017, regardless of method (paper or e-file). This significant change to the deadline – previously February 28 for paper and March 31 for e-file – will undoubtedly dial up workloads and stress levels for districts.
 
To further complicate matters, the new filing deadline for Form 1099-MISC only impacts filers reporting nonemployee compensation payments in Box 7. Although the overwhelming majority of 1099-MISC filers will report information in Box 7, there is bound to be some confusion.
 
Last year, many filers provided recipient copies first and waited for employees or vendors to review the forms prior to sending to the IRS. This approach allowed time for errors to be caught and corrected before the form was filed with the federal government. It also enabled districts to get updated copies to the recipient without the need to create a corrected 1099 or W-2C. The new reporting deadlines all but eliminate this option, making it safe to assume that more corrected forms will be sent this year.
 
To avoid mistakes and complications, it is important to be prepared for this season and aware of what has changed. By planning for these new deadlines, form changes, and other updates, it is less likely that you will file late and incur penalties associated with noncompliance and untimely filings. Additionally, we recommend reviewing the required data as soon as possible to allow extra time to edit errors or gather further information if needed.

 
 

Affordable Care Act Changes

With the first year of Affordable Care Act (ACA) filing behind us, it’s now time to begin thinking about the upcoming ACA filing season, and we are ready to help with the latest insight and information.
 
2015 reporting presented a number of challenges for school districts to navigate, such as:
  • Which code do I use?
  • Where is this data stored?
  • How do I provide the forms to employees and the IRS?
  • When do I have to file these forms?
  • What corrections are necessary?
Skyward customers benefited from the ACA Support Portal, a collection of resources to help HR teams gain a better understanding of how to use the technology they already have to better track, monitor, and stay compliant with the ACA. So what’s in store for 2016?
 
We expect that there will be four major changes:

1. Filing deadlines: Last year, the filing deadlines were extended. However, the IRS has not indicated that there will be an extension of the reporting deadlines this year. For the 2016 reporting season, the filing deadlines are as follows:
  • Recipient copies – March 2, 2017  **Editor's note - previously 1/31/17, pushed back by the IRS on 11/28/16.
  • Paper copies to Federal Government – February 28, 2017  -or-
  • Electronic copies to Federal Government – March 31, 2017

2. Code additions: Along with the other codes in Lines 14-16 on the 1095, new codes 1J and 1K address conditional offers of spousal coverage.
 
A conditional offer is an offer of coverage that is subject to one or more reasonable, objective conditions (for example, an offer to cover an employee’s spouse only if the spouse is not eligible for coverage under Medicare or a group health plan sponsored by another employer). 
 
This still counts as an offer of coverage for the purposes of satisfying ACA requirements, and it may impact a spouse’s eligibility for the premium tax credit.  In the event an employee needs assistance regarding the premium tax credit eligibility, employers need to be able to provide the conditions that the conditional coverage was offered.
 
An employer may not report a conditional offer of coverage to an employee’s dependents as an offer to the dependents, unless the ALE Member knows that the dependents met the condition to be eligible for the coverage.


3. TIN validation errors: The most frequently asked questions last year were about TIN validation errors. What does it mean?  What exactly is wrong? How do I fix it? The IRS has indicated they will provide better information to assist in the corrections process.


4. No more “good faith effort”: For last year’s pilot run, the IRS only expected organizations (including school districts) to make a “good faith effort” with ACA reporting. This year, the IRS is expecting that information will be correct, complete, and filed on time, without exceptions. Districts that fail to comply may be required to pay steep penalties.

 

Learn More

Nelco provides 1095 forms that are compatible with Skyward and can help make your filing process as simple and smooth as possible. For more information, contact Nelco at 800-266-2669 or nelco@nelcosolutions.com.

 

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