Tax Tip of the Week | No. 337 | Changes Coming to W-2, 1099 and 1095 Forms - Part 1

Tax Tip of the Week | January 13, 2016 | No. 337 | Changes Coming to W-2, 1099 and 1095 Forms - Part 1Pretty soon you will start to receive your year-end tax documents.  This year, you need to be prepared for some new forms and new looks to some old forms.  In this article, we will look at changes required for compliance of the Affordable Care Act and W-2s.  Next week we will look at 1099 changes.The Internal Revenue Service is making yearly adjustments to W-2 and 1099 forms, while adding brand new 1095 forms related to the Affordable Care Act to the list of required forms for filers this year.Greatland Corporation, a provider of W-2 and 1099 products for businesses, has compiled a list of what businesses need to be aware of when filing this year.2015 Affordable Care Act Forms Required for 2015 ReportingUnder the ACA, or Obamacare, all providers of health care, including employers that provide self-insured coverage, must file returns with the IRS that include information about the coverage and each covered individual.Employers should report this information on Forms 1095-B or 1095-C, depending on the size of the employer. Providing 1095 forms became mandatory starting in the 2015 tax year and filers must send the forms not only to their eligible recipients but also to the IRS in order to remain in compliance with ACA reporting requirements.  Filers with 250 or more forms must file them electronically. Incorrect filings will not be penalized for calendar year 2015 filing (reported in 2016) if employers/insurers file on time and make a good faith effort to comply. Below is a summary of each new form related to the Affordable Care Act:•    Form 1095-B—Health CoverageInsurers and self-insured employers that provide health plans are required to report data on all covered individuals.•    Form 1094-B—Transmittal of Health Coverage Information Returns•    Form 1094-B is the transmittal for Form 1095-B.•    Form 1095-C—Employer-Provided Health Insurance Offer and CoverageEmployers with 50 or more full-time employees (including full-time equivalent employees) are required to report (whether or not they offered coverage to their employees) by providing each full-time employee with Form 1095-C. This form requires information such as whether the employee was offered coverage, for which months, and the employee's share of the lowest-cost monthly premium for self-only minimum value coverage. A large employer with a self-insured plan will only be required to submit Form 1095-C, as the information on Form 1095-B can be included on Form 1095-C.•    Form 1094-C—Transmittal of Employer-Provided Health Insurance offer and Coverage Information Returns2015 W-2 Form ChangesThird-party Sick Pay Recap ReportingFor wages paid in 2015, Form 8922, Third-Party Sick Pay Recap, will be used to report total third-party sick pay wages paid to employees when liability for the employer and the employee portions of Federal Insurance Contributions Act (FICA) taxes on the wages is split  between the employer for whom services are normally rendered and the third-party payer. Form 8922 replaces the Third-Party Sick Pay Recap Form W-2 and W-3. Form 8922 is filed with the IRS rather than the SSA.Virtual CurrencyThe fair market value of virtual currency (such as Bitcoin) paid as wages is subject to federal income tax withholding, FICA tax and Federal Unemployment Tax Act (FUTA) tax and must be reported on Form W-2.You can contact us in Dayton at 937-436-3133 and in Xenia at 937-372-3504.  Or visit our website.Rick Prewitt – the guy behind TTW...until next week.