The IRS issued a notice of proposed rulemaking (NPRM) on July 23 that effectively could lower the 250-return threshold that applies to electronic filing requirements. Currently, businesses with fewer than 250 information returns (e.g., 1094/1095 ACA returns) can mail the returns to the IRS, bypassing the need to find a vendor to electronically file on their behalf. If the proposed rule is finalized, the new regulations lower the threshold to 100 returns for due dates during a calendar year. The new proposal also aggregates the number of returns required throughout the year, so a business would have to consider all returns required in a calendar year, making it easier to exceed the lower 100-return threshold.
It’s clear this move is designed to put a virtual end to paper form submissions. Smaller employers who file 1094/1095 B and C series and Forms W-2 are likely to exceed the new threshold. The IRS is accepting public comment on the NPRM through September 21. Bukaty Companies will continue to monitor the issue given the impact on small to mid-size companies.