In the past, the Internal Revenue Service (IRS) allowed applicable large employers (ALEs) to file their Form 1095-Cs on paper if they had less than 250 informational returns. However, in their final rule issued on February 23, 2023, the IRS not only lowered the filing threshold from 250 to 10 information returns but also added a requirement to aggregate Form 1095-Cs with certain informational returns, such as the Form W-2, when determining if the 10-informational return threshold has been met.
Impact to ALEs
Since ALEs are employers with 50 or more full-time employees, or full-time equivalent employees, it seems highly unlikely that an ALE would ever fall below 10 information returns, considering the new requirement to aggregate the different informational returns, and based on the number of Form W-2s for that employer size. While there are other informational returns in addition to Form 1095-C and Form W-2, these are two of the most common that are subject to this aggregation requirement.
- ALEs should be aware of this new requirement starting with the 2023 Form 1095-Cs (that are required to be filed during the first quarter of the 2024 calendar year).
- Most ALEs must now file their Form 1095-Cs electronically (which is generally due annually by March 31st).
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