How to File Form 1094-B Electronically

Form 1094-B is a transmittal document used by health coverage providers and certain small employers to report minimum essential coverage (MEC) information to the Internal Revenue Service (IRS) under the Affordable Care Act (ACA). This form summarizes submitted data, identifies the filing entity, and ensures the IRS receives a complete picture of health coverage.

Electronic Filing Thresholds

The IRS mandates electronic filing for Form 1094-B and its associated Forms 1095-B if a filer meets certain volume thresholds. For tax year 2023 and beyond, if an entity is required to file 10 or more information returns of any type during the calendar year, they must file all such returns electronically. This aggregation rule means that employers must count all W-2s, 1099s, 1095-B, and other information returns together to determine if they meet the 10-form threshold. This requirement significantly expanded the scope of mandatory electronic filing. Failure to comply with these electronic filing mandates can result in penalties. Penalties for not filing or furnishing accurate information returns can be substantial, potentially reaching up to $330 per form for incorrect or untimely submissions, with no maximum limit for intentional disregard.

Preparing for Electronic Submission

Preparing for electronic submission of Form 1094-B and Forms 1095-B involves several steps. Obtaining a Transmitter Control Code (TCC) is a necessary first step for entities planning to transmit information returns directly to the IRS Affordable Care Act Information Returns (AIR) system. A TCC is a five-character alphanumeric code that identifies the filer to the IRS.

The application for a TCC is made using IRS Form 4419, “Application for Magnetic Media Reporting of Information Returns.” This application process can take several weeks, often up to 45 days, and should be initiated well in advance of filing deadlines. After receiving a TCC, direct filers must also pass a communication test with the IRS AIR system to ensure their software is compatible for transmission.

Filers have two primary methods for electronic submission: direct filing with the IRS AIR system or using third-party software or service providers. Direct filing is suitable for organizations with the technical expertise and in-house systems capable of generating the required XML files according to IRS specifications, requiring direct interaction with the IRS AIR system. Many businesses opt for third-party software or service providers, such as payroll providers or dedicated ACA reporting services. These providers typically handle the technical aspects of TCC management and XML formatting, streamlining the process for the filer.

Regardless of the chosen method, gathering accurate and complete data is paramount. For Form 1094-B, filers need to provide their name, Employer Identification Number (EIN), contact person details, address, and the total number of Forms 1095-B being transmitted. For each associated Form 1095-B, specific details are required, including the responsible individual’s name, Social Security Number (SSN) or Taxpayer Identification Number (TIN), date of birth if an SSN is unavailable, and address. Information about the employer, if applicable, and details about the months of coverage for each covered individual are also necessary. For direct filers, this collected data must be converted into an IRS-specified XML schema for successful submission to the AIR system.

Steps for Electronic Filing

Once preparatory steps are complete, electronic submission of Form 1094-B and its accompanying Forms 1095-B can begin. For those filing directly through the IRS AIR system, the process involves logging into the system using the TCC and credentials obtained during preparation. The filer then navigates the system’s interface to upload the pre-formatted XML file containing the ACA information.

The system provides immediate feedback upon file receipt, confirming that the transmission has been initiated. This initial confirmation is a receipt ID, which serves as proof that the file has been successfully uploaded to the IRS system. For filers utilizing third-party software or service providers, the submission process typically involves uploading the prepared data to the provider’s secure platform. The software then handles the direct transmission to the IRS AIR system on the filer’s behalf.

After the data is uploaded, the software often includes a review process to ensure accuracy before final submission. Upon initiation of the submission, the third-party provider will relay confirmation of transmission, which may include a confirmation number or an “Accepted” status from the IRS. This indicates that the file has been received by the IRS for processing.

Post-Submission Procedures

After electronically submitting Form 1094-B and Forms 1095-B, monitoring the submission status is an important follow-up step. Filers can track the status through the IRS AIR system or their chosen third-party software. Common statuses include “Accepted,” indicating successful receipt and initial processing; “Rejected,” meaning the file contained errors preventing acceptance; and “Accepted with Errors,” signifying that the file was accepted but certain issues were identified.

If a submission is rejected or accepted with errors, corrections are necessary. For electronically filed forms, corrections are generally made by submitting a “replacement” or “corrected” file through the same electronic channels used for the original submission. This typically involves marking the corrected forms with a specific indicator and resubmitting them.

Maintaining comprehensive records is also an important post-submission procedure. Employers and coverage providers should retain copies of the submitted forms, transmission receipts, and any correspondence with the IRS for at least six years. This record-keeping ensures compliance and provides documentation in case of future IRS inquiries or audits.