The Top Three Takeaways from the IRS’ Final Guidance for Utilizing the AIR System
The IRS has released their final guidance for utilizing the Affordable Care Act Information Returns (AIR) System and it isn’t light reading. Maybe that’s because for employers with over 250 employees, required to file 1094-C and 1095-C forms electronically, it isn’t something to take lightly.
For the typical overworked executive, we have highlighted the top three takeaways from this guidance:
- There is a rigorous process in place outlining who must test and the criteria for passing testing.
To do: Ask your vendor – Where they are in this process? Get help if you unsure if you meet the criteria for electronic filing this year. If a software provider states that they aced their AIRS test, qualify that they are re-testing when the Affordable Care Act Assurance Testing System (AATS) is available in November for testing Processing Year 2016 (PY16) scenarios. Even if a software provider passed the test this past summer, they need to pass the upcoming test for specific scenarios required for PY16 filings.
- If you plan to file these returns yourself, there are communication procedures, administrative requirements, and transmission formats that must be followed with a degree of precision that might pale only second to rocket science. Transmittal Control Codes are required as are digital certificates for Business Representatives who are transmitting information returns through AIRS. You need to determine if you will be exchanging information returns with AIRS through either User Interface (UI Channel) or by A2A Channel, Application to Application. Both methods present unique challenges. A2A requires strong levels of authentication and a completed Automated Enrollment Application, for example. The UI transmission of XML files may be very time consuming depending on the volume of returns that you are filing.
To do: Don’t let anyone tell you this will be a breeze – you may need help just keeping and accessing the correct records in the first place. Be realistic about your state of affairs and be sure that someone within your company “owns” this.
- There aren’t that many changes from earlier guidance, but the changes include things like “guidance on message compression”. From a layperson’s perspective it could be hard to distinguish if Publications 5164 and 5165 detailing transmission and testing guidance are issued by NASA or the IRS. If only the IRS would practice some “message compression”…
To do: If you aren’t someone with an appetite for navigating tutorials titled “ACA application for Transmitter Control Code(TCC)” and don’t yet have a vendor who can help you file, please don’t wait. That tutorial alone is 20 pages long.
If you want more information, please check out the original source here: