ACA Reporting Deadlines and More for Tax Year 2023

February 16, 2024

Affordable Care Act (ACA) reporting has started for tax year 2023. ACA reporting can quickly become complicated and costly with IRS penalties if your business does not have an efficient process in place. Although regulations have generally stayed the same for this reporting season, there are some important updates all businesses should be aware of when filing their ACA forms with the IRS this year. 

The IRS requires ACA filing with the goal of knowing where each individual gets their healthcare coverage from during the calendar year. Taxpayers can get insurance coverage through one of three places: 

  1. ACA Marketplace (Form 1095-A) 
  2. Insurance company (Form 1095-B) 
  3. Applicable large employers (ALEs) (Form 1095-C) 

Knowing this information allows the IRS to deliver penalties to applicable ALEs and determine persons who are eligible for tax credits on their individual returns. As a refresher, IRS Form 1095-C is usually filed by ALEs (generally those who employ 50 or more people), which is required under code 6056. This tax form proves an offer of minimum essential coverage (MEC) was provided to each applicable employee as required under action 4980H. 

ACA updates for tax year 2023

For tax year 2023, we did not see many changes from the IRS surrounding ACA tax forms. However, there are three important penalty changes to be aware of for the 2023 reporting season: 

T.D.9972 now requires businesses to electronically file information returns, including ACA Forms, at a threshold of 10+ returns, counted in the aggregate. The lowered threshold includes a variety of information returns including W-2s, 1099s, ACA Forms, 1042-S Forms, and more. Prior to 2023 reporting, the threshold was 250+ returns, applied to each form individually.  

  1. The 4980H(a) penalty increased to $2,880 for tax year 2023. This penalty is issued when an employer does not offer the MEC to at least 95% of its full-time employees (and their dependents) for any month during the tax year, and at least one-full time employee receives a Premium Tax Credit (PTC) for purchasing coverage through the marketplace. 
  2. The 4980H(b) or Employer Shared Responsibility Penalty increased to $4,320 for tax year 2023. This penalty is assessed when an employer fails to offer coverage that meets the affordability and minimum value requirements. This penalty is typically only issued when the 4980H(a) penalty does not apply. 

The penalties specified under codes 4980H(a) and 4980H(b) are slated for another increase for 2024, increasing to $2970 and $4460, respectively. For 2023 returns (filed in early 2024), the penalty for failing to file electronically, failure to provide a correct payee statement, and/or filing inaccurate information is $310 per return (with a maximum of $3,783,000 per calendar year).  

ACA reporting deadlines for 2023

As of tax year 2023, all businesses filing ten or more forms must file electronically. The ACA reporting deadline for electronic filing is April 1, 2024, while the ACA reporting deadline for paper filing is February 28. 

How should I prepare for the 2023 ACA reporting season? 

We’ve compiled a few key tips to help you prepare for the ACA reporting deadlines for 2023: 

  1. Ensure your data is accurate. Doing a cleanse of your data can help eliminate errors when transmitting, which often lead to costly penalties. 
  2. File electronically to ensure you have enough time to accurately report your data. The due date for Forms 1094-C and 1095-C is April 1 when filing electronically, versus February 28 for paper filings. This gives you an extra month to prepare your data for transmittal. 
  3. Find a solution that fits your needs. If you are a business that hovers around 50 employees, finding a solution and contract terms that allows for flexibility in your reporting from year to year is essential. 
  4. Confirm your business’ state reporting obligations. Since the mandate to have health insurance was removed at the federal level in 2017, many states began to administer their own requirements on healthcare. California, Massachusetts, New Jersey, Rhode Island, Vermont and the District of Columbia all require ACA reporting at the state level, with more states expected to edict mandates in the future. 

It is not too late to implement a Sovos solution to help with your ACA reporting needs. Sovos can give valuable time back to your team and simplify your ACA reporting process. 

Take Action

With over 10 years of experience filing ACA forms, our Tax Information Reporting – ACA solution can handle all of your reporting needs, no matter how regulations change. Talk to our compliance experts today.

Sign up for Email Updates

Stay up to date with the latest tax and compliance updates that may impact your business.



Sovos is a global provider of tax, compliance and trust solutions and services that enable businesses to navigate an increasingly regulated world with true confidence. Purpose-built for always-on compliance capabilities, our scalable IT-driven solutions meet the demands of an evolving and complex global regulatory landscape. Sovos’ cloud-based software platform provides an unparalleled level of integration with business applications and government compliance processes. More than 100,000 customers in 100+ countries – including half the Fortune 500 – trust Sovos for their compliance needs. Sovos annually processes more than three billion transactions across 19,000 global tax jurisdictions. Bolstered by a robust partner program more than 400 strong, Sovos brings to bear an unrivaled global network for companies across industries and geographies. Founded in 1979, Sovos has operations across the Americas and Europe, and is owned by Hg and TA Associates.
Share this post

North America ShipCompliant
April 17, 2024
3 Reasons Craft Beer Drinkers Want DtC Shipping

While only 11 states and D.C. allow direct-to-consumer (DtC) beer shipping, more than half of Americans ages 21+ (51%) would purchase more craft beer if they were able to have it shipped directly to their home. In this blog, we discuss the top three reasons why craft beer drinkers want beer sent directly to them […]

North America ShipCompliant
April 17, 2024
States Are Looking to Expand DtC Spirits & Beer Availability

2024 is shaping up to be a banner year for legislative efforts related to the direct-to-consumer (DtC) shipping of beverage alcohol. While these proposed laws span a range of legal issues, the primary driver of the bills is expanding access to the DtC market for beer and spirits producers. Currently, 47 states and D.C. permit […]

North America Tax Information Reporting
March 22, 2024
Market Conduct Annual Statement Reminders and More

On the second Wednesday of each month, Sovos experts host a 30-minute webinar, Water Cooler Wednesday, to share the latest updates on statutory filings. In March, Sarah Stubbs shared information about the many filings due after March 1, from Market Conduct Annual Statements to health supplements for P&C and life insurers writing A&H businesses and […]

North America ShipCompliant
March 21, 2024
How Producers Can Build a DtC Shipping Market

Direct-to-consumer (DtC) shipping has become one of the leading sales models for businesses of all sizes and in all markets. The idea of connecting directly with consumers is notably attractive, as it helps brands develop a personal relationship and avoid costly distribution chains. Yet, for all its popularity, DtC is often a hard concept to […]

North America ShipCompliant
March 20, 2024
Key Findings from the 2024 DtC Beer Shipping Report

This March, Sovos ShipCompliant released the fourth annual Direct-to-Consumer Beer Shipping Report in partnership with the Brewers Association. The DtC beer shipping report features exclusive insights on the regulatory state of the direct-to-consumer (DtC) channel, Brewers Association’s perspective and key data from a consumer preferences survey. Let’s take a deeper dive into some of the […]