Penalties for ACA information reporting will be higher for filings due in 2025. The IRS has updated the penalty amounts outlined in Revenue Procedure 2023-34. These penalties apply to organizations not meeting the Affordable Care Act's (ACA) requirements under Internal Revenue Code Sections 6055 and 6056. Now that the 2024 filing deadlines for the 2023 calendar year have passed, it's time to focus on preparing for next year's filings and understanding the impact of these updated penalties. The updated penalty amounts apply to the 2024 information returns and individual statements that must be filed and provided in 2025.
Understanding General Reporting Penalties under ACA Sections 6055 and 6056
A reporting entity that does not meet the requirements of Section 6055 and Section 6056 reporting may face penalties under the general reporting guidelines for:
General Reporting Penalties for Non-Compliance
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Failure to File Correct Information Returns
- Information returns (like Form 1095) not filed accurately or on time can result in penalties under Code Section 6721.
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Failure to Furnish Correct Payee Statements
- Penalties under Code Section 6722 apply when statements, such as Form 1095-C, need corrections before the deadline for individuals.
Waivers and Reductions
- Penalties can be waived if the failure to comply was due to reasonable cause and not willful neglect.
- Penalties may be reduced if the reporting entity corrects errors within a specified timeframe.
Adjusted Penalty Amounts for 2025 Reporting
For information returns and individual statements filed and furnished in 2025 based on 2024 data, the penalty amounts have been adjusted as follows:
- The penalty for failing to file an information return or provide an individual statement is now $330 per return or statement, an increase from $310.
- If returns are corrected within 30 days after the due date or statements are corrected within 30 days after the required date, the penalty remains at $60 per return or statement.
- Corrections made after 30 days but before August 1, 2025, will incur a penalty of $130 per return or statement, up from $120.
- For cases of intentional disregard, the penalty is now $660, increased from $630. In some instances, this penalty may be higher, as it equals the greater of the specified amount or 10% of the total amount of the items required to be reported correctly.
Penalty limits are structured differently based on the size of the business. Small businesses, with average annual gross receipts of up to $5 million over the past three taxable years, face lower maximum annual penalties than larger businesses. Penalties for intentional disregard, however, have no set maximum limit and can exceed other penalties depending on the violation's circumstances. This highlights the varying severity and financial impact of non-compliance with reporting requirements under Sections 6055 and 6056 of the Internal Revenue Code.
2025 Reporting Deadlines for 2024 Information Returns
The reporting deadlines for the 2023 calendar year, which occurred in 2024, have already passed. Looking ahead to next year, the deadlines are as follows:
Individual Statement Furnishing Deadline: March 3, 2025
Individual statements for the 2024 calendar year must be furnished within 30 days of January 31, 2025. Since January 31, 2025, falls on a weekend, the deadline for furnishing these statements is extended to the next business day, March 3, 2025.
Electronic IRS Return Filing Deadline: March 31, 2025
Electronic IRS returns for the 2024 calendar year must be filed by March 31, 2025.
These deadlines are crucial for entities subject to reporting requirements under Sections 6055 and 6056 of the Internal Revenue Code, as failure to comply may result in penalties as adjusted for the 2024 filings.
Updated ACA Reporting Penalties for 2025: CBC's Expert Solutions and Compliance Support
Custom Benefit Consultants (CBC), Inc. is here to help organizations manage the updated ACA reporting penalties for 2025. With these increased penalties affecting next year's filings, CBC provides customized solutions to ensure compliance with Sections 6055 and 6056 of the Internal Revenue Code. Our expert consultants can help you understand the new penalty structures and implement strategies to reduce non-compliance risk.
By partnering with CBC, organizations can proactively prepare for the 2025 reporting deadlines, ensuring the accurate filing of information returns and individual statements. We provide comprehensive support, including penalty waiver assessments for reasonable cause and expedited correction processes. Let CBC optimize your ACA reporting strategy, safeguarding your business against potential penalties and maximizing compliance efficiency.
Contact CBC today to fortify your ACA reporting strategy for 2025. Partner with us to ensure accuracy, compliance, and peace of mind in meeting ACA reporting requirements.
