The IRS recently released an updated version of Publication 5164, entitled “Test Package for Electronic Filers of Affordable Care Act (ACA) Information Returns (AIR),” for tax year 2019 (processing year 2020). The publication describes the testing procedures that must be completed by those filing electronic ACA returns with the IRS, specifically Forms 1094-B, 1095-B, 1094-C, and 1095-C. As a reminder, those who are filing 250 or more forms are required to file electronically with the IRS.

Importantly, the testing procedures apply to the entity that will be transmitting the electronic files to the IRS. Thus, only employers who are filing electronically with the IRS on their own would need to complete the testing. If an employer has contracted with a software vendor who’s filing on behalf of the employer, then the testing and this publication would not apply to the employer, but would apply to the software vendor instead.

Similar to prior years, the IRS provides two options (see pages 12-13) for submitting test scenarios for reporting year 2019: predefined scenarios and criteria-based scenarios. Predefined scenarios provide specific test data within the submission narrative for each form line that needs to be completed. Criteria-based scenarios give more flexibility to test and create data that may be unique to their organization when completing the necessary test scenarios. Correction scenarios are also provided (see page 17), but those are not required in order to pass testing.

As a reminder, electronic filing of 2019 returns will be due March 31, 2020. Most large employers that are required to file the forms work with third-party vendors in performing electronic filing, so the testing outlined in Publication 5164 wouldn’t apply to the employer. But if the employer is filing on their own, they’ll want to review the updated testing requirements in Publication 5164. Large employers that are required to file electronically, and would like information on third-party vendors who can assist, can contact their advisor for more information.

IRS Publication 5164 »
AIR Program »

Source: NFP BenefitsPartners