Form 1094-C Instructions: Deadlines, Penalties, and Corrections

Form 1094-C is the cover sheet an Applicable Large Employer sends to the IRS with its stack of Forms 1095-C to report health coverage offered to full-time employees under the Affordable Care Act. If your organization averaged at least 50 full-time employees (including full-time equivalents) during the prior calendar year, you have to file. For returns due in 2026, late or incorrect filings run $340 per form, with annual caps reaching into the millions for larger employers.¹

Who Has to File

The filing obligation falls on Applicable Large Employers, or ALEs. You are an ALE if you employed an average of at least 50 full-time employees, counting full-time equivalents, on business days during the prior calendar year. Full-time means averaging at least 30 hours of service per week. To get the equivalent count for part-timers, add up their monthly hours and divide by 120. Add that number to your actual full-time headcount. If the total hits 50, you file.²

Seasonal Workers Can Take You Out

If you exceeded 50 full-time employees for 120 days or fewer during the year, and the workers who pushed you over were seasonal, you are not treated as an ALE for that year.³ Retail operations that staff up for the holidays are the typical example. If the extra headcount stays for four months or less and the workers are genuinely seasonal, no filing is required.

Common Ownership Pulls Small Entities In

Companies under common ownership or control have to pool their workforces when counting toward 50 employees. The IRS treats the combined group as one employer for the threshold test. But each separate legal entity in the group files its own Form 1094-C under its own Employer Identification Number.⁴ A subsidiary with 15 employees still files if the parent group collectively hits 50. That catches organizations that assume only the largest entity has to report.

What Goes on the Form

Form 1094-C has four parts. Getting the underlying records together before you start prevents most of the errors that later trigger penalties.

Part I: Employer Information and the Authoritative Transmittal

Part I collects the basics: legal name, EIN, address, and a contact person the IRS can reach. You also report the total number of Forms 1095-C you are transmitting. The critical checkbox is Line 19, which designates this particular Form 1094-C as the Authoritative Transmittal. If you split your 1095-C filings into multiple batches, each batch needs its own 1094-C cover sheet, but exactly one of those 1094-C forms must be marked as the Authoritative Transmittal. That version carries the summary data for the entire organization.⁴ Within an aggregated group, each entity designates its own Authoritative Transmittal. There is no single group-level version.

Parts II and III: The Coverage Data

Part II captures certifications about your coverage offers, including whether you qualify for a simplified reporting method. Part III is where the month-by-month data lives. For each calendar month, you report whether you offered minimum essential coverage to at least 95% of full-time employees and their dependents, along with your full-time employee count and total employee count.⁴ If you offered coverage every month, you can check a single “All 12 Months” box instead of filling in each row. The IRS uses this data to identify coverage gaps and to flag employers who may owe a shared responsibility payment.

Part IV: Other Group Members

If your organization belongs to an aggregated employer group, Part IV requires the names and EINs of up to 30 other group members.⁴ Skip Part IV if your company operates on its own with no common-ownership ties.

Deadlines and Extensions

The due dates depend on how you file:

Paper filing: February 28 of the year following the coverage year.⁵
Electronic filing: March 31 of the year following the coverage year.⁵
Furnishing Form 1095-C to employees: typically early March (March 2 for the 2025 tax year). This is a separate deadline from the IRS filing deadline, with its own penalty exposure.

Form 8809 gives you an automatic 30-day extension to file with the IRS.⁶ A second 30-day extension is available, but it is not automatic. You have to submit the request before the first extension expires, and the IRS evaluates it on the merits. File Form 8809 before your original due date. An extension filed late does not protect you from penalties for the gap between the original deadline and the date you actually submitted.

When Electronic Filing Is Required

If your organization files 10 or more information returns of any type during the calendar year, you must file Forms 1094-C and 1095-C electronically.⁷ The 10-return threshold counts across all information return types combined: W-2s, 1099s, and ACA forms all go into the same bucket. An employer filing eight 1095-Cs and three W-2s has hit 11 total and has to file everything electronically.

Electronic ACA returns go through the ACA Information Returns (AIR) system, not the same platform used for other information returns.⁷ Filing on paper when you were required to file electronically carries a penalty of $340 per return for 2026 unless you received a hardship waiver or can demonstrate reasonable cause.⁴

The Qualifying Offer Method

Employers that made a strong, affordable coverage offer to every full-time employee can use a simplified reporting path. A Qualifying Offer means you offered minimum essential coverage with minimum value to the employee, spouse, and dependents for every month the employee was full-time, and the employee’s required contribution did not exceed 9.5% (as adjusted) of the mainland single federal poverty line divided by 12.⁴

The practical benefit is less paperwork. For any month where an employee received a Qualifying Offer, you enter code 1A on Form 1095-C Line 14 and leave Line 15 (the required contribution) blank. For employees who received a Qualifying Offer for all 12 months and did not enroll in self-insured coverage, you can even skip sending them a full Form 1095-C and provide a simplified notice instead. If your coverage is generous enough to qualify, this method cuts both data entry and the risk of reporting errors on contribution amounts.

Penalties for Late or Incorrect Returns

Penalties for the 1094-C and 1095-C fall under two code sections. Section 6721 covers failures to file correctly with the IRS. Section 6722 covers failures to furnish correct statements to employees.⁸ Both carry the same per-return rates for 2026, and both apply independently. The same error can be penalized under each.

The 2026 Tiers

How fast you correct determines what you pay:¹

Corrected within 30 days of the due date: $60 per return
Corrected after 30 days but by August 1: $130 per return
Filed after August 1 or never filed: $340 per return
Intentional disregard: $680 per return with no annual cap

Annual caps depend on employer size. For employers with average annual gross receipts above $5 million over the most recent three tax years, the ceilings are $683,000 (30-day tier), $2,049,000 (August 1 tier), and $4,098,500 (full penalty tier). Smaller employers get lower caps.⁹ Intentional disregard removes the cap entirely, so penalties scale with no ceiling regardless of company size.

The tiering creates a real incentive to fix mistakes fast. Discovering an error in mid-March and correcting it within 30 days runs $60 per return instead of $340. Multiplied across hundreds of employee forms, that difference is substantial.

Reasonable Cause

Penalties can be waived if you show reasonable cause and the failure was not due to willful neglect.¹⁰ You have to demonstrate either significant mitigating factors or events beyond your control, plus proof that you acted responsibly before and after the failure. That means requesting extensions when possible, taking steps to prevent or fix the problem, and correcting errors promptly once discovered. General claims of not knowing or being too busy do not meet the standard. The IRS generally expects corrections within 30 days of discovering the issue.

Fixing Errors After Filing

The correction process depends on which form contains the error.

To correct the Authoritative Transmittal (Form 1094-C), file a new, fully completed Form 1094-C with the CORRECTED box checked at the top. Do not attach any Forms 1095-C to this corrected transmittal. It stands alone.⁴ Only correct the Authoritative Transmittal version. Non-authoritative transmittals do not get corrections filed.

To correct a Form 1095-C, file a new complete version with the CORRECTED box checked, and include a new (non-corrected) Form 1094-C as its cover sheet. You also have to send the corrected 1095-C to the affected employee so their records match what the IRS has.

Speed matters because of the tiered penalties. A correction filed within 30 days of the original due date costs $60 per form. Wait until after August 1 and you are paying $340. File corrections as soon as you spot the problem.

A Different Penalty Track: Shared Responsibility Payments

Filing penalties under Sections 6721 and 6722 are separate from the employer shared responsibility payment under Section 4980H. If an ALE fails to offer minimum essential coverage to at least 95% of its full-time employees and their dependents, and at least one full-time employee receives a premium tax credit through a marketplace exchange, the IRS can assess a payment of $3,340 per full-time employee (minus the first 30) for 2026. Even employers that offer coverage can face a payment of up to $5,010 per employee who receives marketplace subsidies if the coverage was unaffordable or did not provide minimum value.² Form 1094-C is how the IRS identifies which employers owe these payments, so inaccurate reporting does more than risk filing penalties. It can trigger or inflate a shared responsibility assessment built on incomplete data.

1
Internal Revenue Service. Information Return Penalties
2
Office of the Law Revision Counsel. 26 USC 4980H – Shared Responsibility for Employers Regarding Health Coverage
3
Internal Revenue Service. Determining if an Employer Is an Applicable Large Employer
4
Internal Revenue Service. Instructions for Forms 1094-C and 1095-C
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Internal Revenue Service. 2025 Instructions for Forms 1094-C and 1095-C
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Internal Revenue Service. Form 8809, Application for Extension of Time To File Information Returns
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Internal Revenue Service. Topic No. 801, Who Must File Information Returns Electronically
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Office of the Law Revision Counsel. 26 USC 6721 – Failure To File Correct Information Returns
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Internal Revenue Service. Revenue Procedure 2024-40
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eCFR. 26 CFR 301.6724-1 – Reasonable Cause