This blog was last updated on June 27, 2021
Once again, close to a regulatory deadline, the IRS has recently released an updated Publication 5165 for ACA information return transmittals. This guide outlines the communication procedures, transmission formats, business rules, and validation procedures for returns transmitted electronically through the AIR system. Do you know how to implement all the following technical changes? Here at Sovos, our developers are making the right adjustments in order to ensure our clients can correctly send their 1094 transmittal for all ACA forms on time and achieve full compliance during this first year of this mandatory tax reporting obligation. Some of the changes to the Publication 5165 guide include the following:
- Clarification that TCCs are uppercase alphanumeric characters.
- Quotations marks are added to table 4-2: Allowable Characters, if escaped.
- The note regarding special characters has been modified. It is now a caution note and clarifies that PersonFirstNm, PersonMiddleNm, and PersonLastNm cannot contain any special characters, including apostrophes. It also notes that the escaped apostrophe will be allowed in the BusinessNameLine1Txt and BusinessNameLine2Txt. For the full Caution note, please see Sec. 4.6.3, pg. 24
- Several new TPE errors were added Table 5-1, List of TPE Errors.
- Error prefix AIRFE was removed from Table 6-1, AIR Error Categories
- Clarification added to Sec. 6.2, Status Record for Information Returns, noting that the Acknowledgment and error data file may not be ready for up to 7 days after the ReceiptID is provided. Transmitters should contact the help desk only after this response time has been exceeded.
- Clarification that the XpathContent portion of the Transmission Acknowledgment. The guide now notes that the XpathContent is a link to the schema error AIRSHXXX location within the transmitted Form Data File). Previously, it just it was a link to the error location.
- Clarifications regarding the correction process if an original submission requires corrections to both Form 1094-C and Form 1095-C. Please see Sec. 7.1. Corrections Process, pg. 45 for specific instructions.
- Clarification to Sec. 8 Extension of Time to File, noting that no Extension Applications will be processed due to the automatic extension previously granted for Processing Year 2016.
These are just some of the latest updates to the AIR system, the portal created specifically for ACA reporting. As the deadline draws closer, and you prepare all your data to be sent, having the correct transmittal feed in place is crucial to avoid delays and errors that can cost you in penalties and reputation due to upset customers. Do you have a solution built to handle this ongoing complex obligation? Are you still looking for a vendor that can help you comply? Connect with one of our experts to have your questions answered about ACA reporting and how we can help your organization achieve full compliance, including the all-important, secure 1094 transmittal to the IRS.
