What Is Form 1094-C: Who Files, Deadlines, and Penalties

Form 1094-C is the transmittal form that large employers file with the IRS each year to summarize the health insurance coverage they offered their workforce. It travels with the individual Form 1095-C statements the employer prepares for each full-time employee, and together those filings let the IRS enforce the Affordable Care Act’s employer shared responsibility provisions. Any business that averaged at least 50 full-time employees (including full-time equivalents) in the prior calendar year has to file it. Getting it wrong can be expensive: coverage-related penalties start at $3,340 per employee for 2026, and separate penalties apply to late or inaccurate returns.

Who Has to File It

The filing obligation applies only to Applicable Large Employers, or ALEs. An employer is an ALE for a given year if it employed an average of at least 50 full-time employees, including full-time equivalents, during the preceding calendar year.¹ A full-time employee is anyone who works at least 30 hours a week or 130 hours in a calendar month.

To count full-time equivalents, add up the hours worked by all your part-time and other non-full-time employees during a month, cap each worker at 120 hours, and divide the total by 120. Do that for every month of the prior year, add each month’s FTE count to that month’s full-time headcount, and divide the sum by 12. If the result is 50 or more, you’re an ALE for the current year.¹

The Seasonal Worker Exception

A business whose workforce only crosses the 50-employee line because of seasonal hiring may not be an ALE. If your headcount exceeds 50 for 120 days or fewer during the year, and the workers who pushed you over that threshold are seasonal workers (people hired for a limited period, such as holiday retail staff), you are not treated as an ALE.¹

Companies Under Common Ownership

Related businesses are combined when the IRS decides whether the group is large enough to be an ALE, but the filing itself doesn’t get combined. Each legal entity in the group (each ALE Member) files its own Form 1094-C and issues its own Form 1095-C statements to its own employees, no matter how small that particular entity is.² If you’re part of an aggregated group, the entities need to coordinate so the IRS can see the whole picture.

What the Form Reports

Form 1094-C is organized in four parts.³ Part I covers basic identification: your name, address, EIN, and a contact person. You also mark whether this Form 1094-C is the Authoritative Transmittal, meaning the single official aggregate submission for the ALE Member. If a Designated Government Entity is filing on your behalf, both sets of contact information have to appear.²

Part II asks whether you belong to an Aggregated ALE Group, reports the total number of Form 1095-C statements attached, and includes certification boxes for two simplified reporting methods: the Qualifying Offer Method and the 98% Offer Method. Both are elections available to employers whose coverage offers meet specific affordability and minimum-value tests.²⁴

Part III is the month-by-month grid. For each of the twelve months you report whether you offered minimum essential coverage to at least 95% of your full-time employees, how many full-time employees you had, and your total employee headcount. For the headcount, pick one consistent day (the first, last, or 12th of the month, or the first or last day of the first payroll period starting in the month) and use it for every month.⁴

Part IV is only for employers in an Aggregated ALE Group. You list every other member of the group by name and EIN so the IRS can tie the related filings together.² The EINs need to match exactly across filings or the IRS system will flag a mismatch.

Deadlines and How to File

For the 2025 tax year (returns filed in 2026), paper Forms 1094-C and 1095-C are due March 2, 2026, and electronic submissions are due March 31, 2026.⁴ The paper deadline is normally February 28, but that date is a Saturday in 2026 so it moves to the next business day. Employees have to receive their individual Form 1095-C copies by March 2, 2026, which is a separate obligation from the IRS filing.

Paper is rarely an option in practice. If your business files 10 or more information returns of any kind during the year, you have to submit your ACA returns electronically through the IRS’s Affordable Care Act Information Returns (AIR) system.⁵ That 10-return threshold counts all information returns combined, including W-2s, not just ACA forms.⁶ Nearly every ALE crosses that line on payroll forms alone. Employers with fewer than 10 returns may still file on paper.

What It Costs to File Wrong

Two separate penalty regimes hang on Form 1094-C. One targets the underlying coverage the form reports. The other targets the accuracy and timeliness of the form itself.

Coverage Penalties Under Section 4980H

The bigger risk is the employer shared responsibility penalty under Section 4980H of the tax code. If an ALE fails to offer minimum essential coverage to at least 95% of its full-time employees and their dependents in any month, and at least one full-time employee gets a premium tax credit through the Health Insurance Marketplace, the employer owes a penalty for that month. For 2026 the annualized amount is $3,340 per full-time employee, minus the first 30 employees.⁷⁸ An employer with 100 full-time employees would calculate the penalty on 70 of them, producing a potential annual assessment of $233,800.

A second penalty applies when the employer does offer coverage but the coverage is unaffordable or does not provide minimum value, and a full-time employee still receives a premium tax credit. That penalty is $5,010 per year for 2026 for each employee who received subsidized Marketplace coverage.⁸ Coverage is generally treated as unaffordable if the employee’s required contribution for self-only coverage exceeds 9.96% of household income for plan years beginning in 2026.⁹ The 4980H(b) total for any month is capped at what 4980H(a) would have produced.

Filing Penalties Under Section 6721

Even employers whose coverage is fine can be penalized for filing the paperwork late or with errors. Section 6721 penalties for returns due in 2026 scale with how quickly you fix the problem:¹⁰

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 not filed at all: $340 per return
Intentional disregard: $680 per return with no annual cap

Annual caps apply to the non-intentional tiers based on the employer’s gross receipts. Employers with gross receipts above $5 million face a maximum of $4,098,500 per year; smaller employers cap at $1,366,000.¹¹ These amounts apply per return, so exposure grows with headcount because each Form 1095-C is a separate return.

Fixing a Return After You’ve Filed It

If you discover an error in a Form 1094-C after submitting it, you can correct it, but only if the original was the Authoritative Transmittal (the one with line 19 checked). Non-authoritative Form 1094-C filings should not be corrected.⁴

To correct the Authoritative Transmittal, prepare a fresh, complete Form 1094-C with the accurate information, check the CORRECTED box at the top, and submit it by itself. Do not attach any Form 1095-C documents. Errors on individual employee statements are corrected on their own Form 1095-C filings.⁴ Speed matters here: the per-return penalty drops from $340 to $60 if you fix the problem within 30 days of the original due date.

Getting More Time

If the deadline is going to catch you short, you can request an automatic 30-day extension by filing Form 8809 by the original due date. No signature or explanation is required for that initial request, and you can submit it electronically through the FIRE system, through IRIS at IRS.gov, or on paper by mail.¹²

One additional 30-day extension is possible, but the second request has to be made before the first expires, has to be filed on paper with a signature, and has to include a written explanation of why more time is needed. An extension does not slow down the Section 6721 penalty clock indefinitely, so treat it as breathing room rather than a substitute for filing on time.

1
Internal Revenue Service. Determining if an Employer Is an Applicable Large Employer
2
Internal Revenue Service. Questions and Answers About Information Reporting by Employers on Form 1094-C and Form 1095-C
3
Internal Revenue Service. About Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns
4
Internal Revenue Service. Instructions for Forms 1094-C and 1095-C
5
Internal Revenue Service. Affordable Care Act Information Returns (AIR)
6
Internal Revenue Service. E-File Information Returns
7
Office of the Law Revision Counsel. 26 USC 4980H – Shared Responsibility for Employers Regarding Health Coverage
8
Internal Revenue Service. Revenue Procedure 2025-26
9
Internal Revenue Service. Revenue Procedure 2025-25
10
Internal Revenue Service. Information Return Penalties
11
Internal Revenue Service. 20.1.7 Information Return Penalties
12
Internal Revenue Service. Form 8809 – Application for Extension of Time To File Information Returns