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Employers and workers are confused about the new tax forms they will need to file their 2015 income tax returns, according to a study by human resource technology company ADP.
The new tax-filing forms, 1094-C and 1095-C, are the first major changes the U.S. government has introduced in more than 70 years.
Form 1095-C is the first new major employee tax information return to be created since 1943, when the IRS introduced Form W-2. The Form 1095-C contains information about employee health care coverage that will be required when they complete their tax returns. But according to ADP’s survey, employers say very few employees are aware they’re getting the new form.
In fact, 83 percent of mid-sized employers and 57 percent of large employers don’t think their employees clearly understand the forms or how they may be related to their 2015 tax filing obligations. In addition, only 20 percent of mid-sized businesses and 32 percent of large organizations have started communicating with their workforce about the new form and the implications it carries.
The new ADP Employer Confidence Report also revealed that 32 percent of large enterprises (those with 1,000 employees or more) and 18 percent of mid-sized businesses (those with 50 to 999 employees) planned to file for an extension.
“Employers need to be prepared to distribute Forms 1095-C to employees by the newly extended deadline of March 31, 2016 as required by the IRS,” said ADP Senior Vice President/General Manager of Health Care Reform Vic Saliterman. “It’s also important for employers to explain the new forms to employees, since they will receive the forms around the same time as the annual Forms W-2.”
In addition to sending 1095-C forms to their workers, they also send the form to the IRS. When they do, they also file Form 1094-C, which serves as a “cover sheet” for the 1095-C forms.