IRS Mandates Electronic Filing of ACA Forms in Nearly All Cases

Smaller employers that have been filing their ACA Forms 1094 and 1095 on paper are in for a change in 2024. That’s when the Internal Revenue Service will require nearly all applicable large employers (ALEs) to file these forms electronically.

Under current rules, employers were not required to file their ACA information returns electronically unless they were submitting at least 250 forms to the IRS. On Feb. 21, 2023, however, the agency reduced this threshold to 10 returns due in 2024 or later.

This means any organization filing at least 10 or more ACA forms in a calendar year will be required to e-file in 2024 (for the 2023 calendar year reporting). The 10-return threshold for information returns includes more than just ACA forms; it also applies to the following:

  • W-2
  • 1099
  • 5948
  • 5330
  • 8955-SSA
  • 5500

With these changes, nearly all ALEs will have to file forms electronically starting in 2024. If the original documents were e-filed, corrections to information returns will also need to be filed electronically. You can obtain a waiver from the IRS if you can prove that this requirement creates an undue hardship for your organization. And in rare cases, religious exemptions might also be available. But these circumstances can be difficult to demonstrate.

The bottom line is that all but the smallest of employers will need to get set up to file electronically going forward. This involves more than a good internet connection. ALEs will to need to find the right software, a payroll vendor (if they don’t already have one), and other resources in order to electronically file.

So if you’re an ALE, now is the time to prepare for this change. Research software vendors and talk to your existing payroll provider. It’ll take time for you to set up the system, populate the data and begin tracking the information you will need to file at year end.  Care also must be taken to make sure your system is set it up correctly to follow ACA rules.

If you have questions about the new rule and how to comply, reach out to your HR consultant.


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