As we approach the 2024 ACA reporting deadlines, businesses must be prepared for the updated penalties released by the IRS for ACA information returns filed in 2026. These new guidelines, announced under IRS Revenue Procedure 2024-40, impact reporting entities’ obligations under ACA mandates and outline penalty increases for non-compliance. Here’s what you need to know about the deadlines, new penalty amounts, and how they affect ACA reporting requirements for 2025 returns.
2024 ACA Reporting Deadlines
The 2024 ACA reporting deadlines are critical for businesses that need to meet compliance standards and avoid penalties. The key dates are as follows:
- March 3, 2025: Individual statements for 2024 must be provided to employees by this date, as the regular deadline (Jan. 31) falls on a weekend in 2025.
- March 31, 2025: Electronic IRS returns for 2024 must be filed by this date.
Marking these deadlines can help your organization avoid penalties related to ACA non-compliance, especially with the increased penalties set for returns filed in 2026.
Increased Penalties for ACA Reporting in 2026
Under the Affordable Care Act, businesses must comply with reporting requirements under Internal Revenue Code Sections 6055 and 6056. For those who fail to meet these requirements, the IRS has updated penalties as follows:
- Failure to File or Furnish Correct Statements: The penalty is now $340 per incorrect return or statement, up from $330.
- Corrections within 30 Days: For errors corrected within 30 days, the penalty remains at $60 per return or statement.
- Corrections After 30 Days but Before August 1: The penalty for corrections made between these dates remains at $130 per return or statement.
- Intentional Disregard: For instances of intentional disregard in filing correct returns or statements, the penalty has increased to $680 per return, up from $660. In some cases, this may be larger based on 10% of the items that required reporting.
These adjusted penalties highlight the importance of accurate and timely ACA reporting to avoid costly mistakes. Remember: Penalties can be waived if the failure is due to reasonable cause and not due to willful neglect, or they may be reduced if corrected promptly.
Small Businesses vs. Large Businesses: Understanding Maximum Penalties
The IRS differentiates maximum penalty amounts for small and large businesses. Specifically, entities with average annual gross receipts of up to $5 million in the last three taxable years face lower maximum penalty limits. For intentional disregard cases, however, there is no maximum penalty, regardless of business size.
Resources and Support for ACA Reporting
The IRS provides various resources to help businesses navigate ACA reporting penalties, including a webpage dedicated to information return penalties. For those needing guidance on calculations, payments, and staying compliant, refer to the IRS resources below:
Staying informed about these changes and planning ACA reporting early can help businesses avoid penalties and streamline their compliance efforts.
Key Takeaways for ACA Compliance in 2025 and Beyond
- Mark Reporting Deadlines: Remember the March 3 and March 31 deadlines for 2024 reporting to avoid early penalties.
- Stay Updated on Penalty Adjustments: Ensure your reporting procedures align with the new penalty increases for 2026 filings.
- Utilize IRS Resources: Take advantage of IRS tools and guidance to streamline your ACA reporting process.
As always, it’s recommended to consult with legal counsel or a compliance expert to navigate ACA requirements effectively. By taking proactive measures, your organization can stay compliant and avoid unnecessary penalties.