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July 7, 2016

Correcting Errors on ACA Tax Forms

If you have submitted your 1094-C and 1095-C tax forms with incorrect information, the Internal Revenue Service requires employers to timely correct the information, refile the forms and re-furnish them to employees.  These information returns must be filed timely and accurately or penalties may apply; however, the IRS has stated that there is relief in 2016 for good faith efforts.

The information that must be fixed includes, but is not limited to, incorrect employer identification numbers, employee names, addresses, or social security numbers.  The IRS 2015 Instructions for Forms 1094-C and 1095-C include a number of specific steps to follow when errors occur, but before we get to the Instructions, let’s examine a little background.


A Little Background:  The AIR System

The IRS’s newly created Affordable Care Act Information Returns (AIR) system was built to accept the 1094-C and 1095-C forms.  The AIR system is different from the system used to electronically file W-2s.  Importantly, the AIR system verifies that the name and SSN on the 1095-C actually matches the Social Security Administration (SSA) records.  If the records do not match, the AIR system returns a TIN/Name mismatch.

Mismatches can occur due to innocuous reasons like typos, misspellings, or employees failing to update the SSA when they get married or divorced. Not so innocuous reasons may involve identity theft.  However, it’s best not to jump to any conclusions and the IRS advises that you should not use the receipt of an IRS notice of a TIN mismatch as grounds for employee termination.

Your first step should be to determine why you’ve received an error or mismatch.  Check your records.  What did your employee list on his or her W-4?  Do you have a copy of the employee’s Social Security card used to complete the I-9?  You may, of course, speak with your employee in order to understand why a mismatched occurred.

Please note, mismatch notices may raise I-9 compliance issues.  If your employee admits that the name and SSN initially provided to you was false, this likely constitutes notice that the individual is not authorized to work under federal immigration law and is subject to termination.  Other circumstances may give rise to constructive or inquiry notice, for example, if an employee provides a new name and SSN an employer may be required to make a reasonable inquiry as to the nature of the change.

To prevent or avoid SSN mismatches employers may take advantage of the SSA’s Social Security number verification service.  Employers may create an account and verify that employee names and SSNs match the SSA’s records.  To sign up for an account visit:


IRS’s Correction Instructions

The instructions provide the following steps that you should follow if you are notified that your forms contain errors:


Form 1095-C

If any of the following are incorrect: Name, SSN, Employer EIN, Offer of Coverage, Premium Amount, Covered Individuals Information, then you must:

1.   Prepare a new Form 1095-C

2.   Enter an “X” in the “CORRECTED” box at the top of the form

3.   Submit corrected Form 1095-Cs with a non-authoritative Form 1094-C transmittal to the IRS

4.   Furnish a corrected Form 1095-C to the employee


Form 1094-C

If any of the following are incorrect:

•    ALE Member or Designated Government Entity (Name and/or EIN)

•    Total Number of Forms 1095-C filed by and/or on behalf of ALE Member

•    Aggregated Group Membership

•    Certifications of Eligibility

•    Minimum Essential Coverage Indicator

•    Full-Time Employee Count for ALE Member

•    Aggregated Group Indicator

•    Section 4980H Transition Relief Indicator

Then you must:

1.   Prepare a new authoritative Form 1094-C

2.   Enter an “X” in the “CORRECTED” box at the top of the form

3.   Submit the standalone corrected transmittal with the correct information present


Timely Furnishing and Filing

Ordinarily the 1095-C must be furnished to employees by January 31 each year and filed with the IRS by February 28 (by mail) or March 31 (electronic filing).  These deadlines were extended for 2016 because this is a new reporting process and the IRS is allowing employers extra time to comply.  For reporting year 2015 only, the furnishing to employees date was extended to March 31, 2016, and the filing with the IRS dates were extended to May 31, 2016 (by mail) and June 30, 2016 (electronic filing).


When Do Corrections Need to be Filed?

According to the IRS, corrections should be filed as soon as possible; however, they do not need to be filed prior to the due dates (above) but they can be.

(For a more complete article on this subject, please go the WGA website (