1095 C Furnishing Requirements in 2026 and Why Your ACA Audit Clock Got Longer

By Sam Newland, CFP · Published: September 5, 2026 · Updated: September 5, 2026

Most write-ups of the 2024 changes stop at the good news. You can skip mailing thousands of 1095-C forms. True, and worth doing. But the same week that reduced your mailing pile also stretched the period during which the IRS can come back and bill you. Read only the first half and you will run a leaner January while quietly shredding the exact records you might need in year five.

What the two December 2024 laws changed for applicable large employers

Two separate bills became law on December 23, 2024. The Paperwork Burden Reduction Act is Public Law 118-167. It amends sections 6055 and 6056 of the Internal Revenue Code so an employer no longer has to hand or mail Form 1095-C and 1095-B to every covered person, and the relief applies to furnishing statements about health coverage. Instead you may furnish on request, if you post a proper notice, an alternative furnishing method for delivering Form 1095-C on request. That change applies to statements for calendar years after 2023.

The second law does something very different. The Employer Reporting Improvement Act, Public Law 118-168, gives you more time to answer a penalty letter, then gives the Internal Revenue Service a defined six-year window to assess employer mandate penalties. It also lets you substitute a covered person's full name and date of birth when you cannot collect a taxpayer identification number, and it treats a prior affirmative consent to electronic delivery as continuing consent unless the individual revokes it in writing. One law lightened the mail. The other reshaped the audit.

Furnishing Form 1095-C on request is legal now, but only if the notice is right

Here is the mechanic in plain terms. Under the new paragraphs added to sections 6055(c) and 6056(c), you are treated as timely furnished when two things are true. You post a clear and conspicuous notice that a covered person may request a copy, informing employees how to obtain it. And, on request, you deliver that copy by the later of January 31 or 30 days after the request date. Those two conditions come straight from the statute itself. This is an alternative manner for furnishing Form 1095-C instead of automatic mailing.

Filing did not change. You still must file correct information returns with the IRS, and you may need to file electronically depending on volume. Form 1094-C is the transmittal form that accompanies the Form 1095-C submission to the IRS. The 2025 Instructions for Forms 1094-C and 1095-C set the filing deadline at March 2, 2026 on paper and March 31, 2026 electronically. So the relief is narrow and specific. You are allowed to stop the automatic employee mailing. You are not allowed to stop reporting to the government. Skip that distinction and you convert a paperwork break into a filing failure.

What a compliant website notice for ACA reporting has to say and how long it stays posted

A vague line buried in an intranet does not count. The IRS instructions spell out what a qualifying notice looks like, and the details are strict enough to trip a casual reader.

• Post it somewhere on your website that is reasonably accessible to every employee, in plain, non-technical language.
• State clearly that an individual may receive health coverage tax information on request.
• Give a real way to ask, an email address, the employer's email address, a physical address, a mailing address, and a phone number for questions.
• Post it by the furnishing deadline, which for the 2025 year is March 2, 2026.
• Keep it in the same spot on your website through October 15, 2026.

That last date matters more than it looks, and the notice should remain a conspicuous notice throughout that posting period. The notice is not a January chore you can pull down after filing season. It has to stay live and unchanged into the middle of October. If your web team recycles pages every quarter, the notice can vanish without anyone noticing, and a vanished notice can undo the furnishing relief you were counting on.

Some employers also use visual clues on the webpage so a "Tax Information" notice is easy to find, as long as the wording stays clear. This website posting is an alternative method and does not replace sending a paper copy to the requesting individual when one is requested.

The relief headlines skipped the part where your exposure grew

Now the half that vendor summaries tend to bury. Before these laws, the IRS Office of Chief Counsel took the position that employer shared responsibility payments under Section 4980H carried no statute of limitations at all. Many employers assumed the ordinary three-year period applied. Nobody could say for sure. That uncertainty was itself a risk. It also affects ACA reporting requirements tied to employer mandate enforcement.

The Employer Reporting Improvement Act replaced the guessing with a number. New section 6501(n) sets a six-year period for the IRS to assess a 4980H payment based on the information reported on the section 6056 return, and the clock starts on the later of the section 6056 return due date or the day you actually filed. For an employer that assumed three years, the retention horizon just doubled. For an employer betting that old assessments would grow stale on their own, the six years removes that hope.

Read the effective date closely, because it hides a sharp edge. The six-year rule applies only to returns due after December 31, 2024. By the statute's own terms the new clock does not start for earlier years. Returns that came due before that date are not handed a closing date by the new rule, and if a due date falls on a weekend or legal holiday, the next business day applies. In practice, that means your 2024 filing and everything after it sits under a six-year clock, while older ACA years still have no defined limitations period. Hold the old files. Do not treat this as a reason to purge.

The 90-day Letter 226-J window is leverage, so use all of it

If the IRS believes you owe an employer mandate penalty, the first contact is a Letter 226-J. The IRS Letter 226-J page explains that it is the initial proposal of an employer shared responsibility payment, built from your Forms 1094-C and 1095-C and your employees' individual returns, which the IRS also uses to report information relevant to premium tax credit eligibility and employer mandate exposure. It is not a bill. You respond on Form 14764, agreeing or disagreeing, with your evidence attached.

The old response window was tight. The new law requires the IRS to allow at least 90 days for any proposed assessment in taxable years beginning after enactment, which for a calendar-year employer means letters tied to 2025 and later. Ninety days is enough to actually win. Pull the 1094-C and every 1095-C for the year in question, reconcile the offer-of-coverage codes line by line, gather the affordability safe harbor evidence you relied on to show whether you offered affordable minimum value coverage or offered affordable minimum essential coverage, and check whether the IRS counted a full-time employee who was in a measurement period, whether certain employees were in a limited non assessment period, or was never full-time.

Most 226-J proposals shrink or disappear once the coding is corrected, especially if the records support offered affordable minimum under the 98% Offer Method. The extra time only helps the employer who has the records ready to answer. Penalty relief may be available for reasonable cause and not willful neglect, but intentional disregard or willful neglect can increase exposure.

A six-year retention plan built for the new statute, and the years that never close

The six-year clock is only as useful as the file you can produce when it rings. Here is a retention plan keyed to the actual rules.

1. For the 2024 tax year and every year after, keep the filed Form 1094-C transmittal and Forms 1095-C, plus proof of filing, for at least six years measured from the later of the filing due date or your actual filing date, and retain proof that the correct form was filed with the IRS. Seven years is a safe operating buffer.
2. Keep the evidence behind each 1095-C, not just the form. That means records showing whether the employer offered minimum essential coverage and whether that coverage met minimum value, the affordability calculation for the year and which safe harbor you used, enrollment and waiver documentation, and the measurement-period data for variable-hour and seasonal staff that determines who was full-time and when. If you are self insured, also keep enrollment records for covered individuals and other coverage information used to complete the forms, and note that non full time employees may still require documentation if their status affects what you report.
3. For ACA years before 2024, retain indefinitely. Those returns are not covered by the new six-year period, so nothing formally closes them.
4. Save your website notice as filed. Screenshot it with a timestamp on the day you post it and again after October 15, so you can prove it was live for the full stretch.
5. Keep records of any electronic-delivery consents and any written revocations, since consent now carries forward year to year, and keep any forms furnished electronically in the electronic format used along with proof of distribution.

These records also support later corrections so you can furnish and file correct information if issues are found.

None of this is busywork. Plan recordkeeping is already a fiduciary duty, and the ACA file is the part most likely to be tested by an outside party years after the fact. To size the stakes, the IRS employer shared responsibility Q and A shows the 4980H(a) payment as your full-time headcount minus up to 30, times an indexed amount that is $3,340 for 2026, with the 4980H(b) figure at $5,010 (IRS Rev. Proc. 2025-26). Multiply that across a workforce and several open years and the value of a clean file becomes obvious.

Why furnish on request is a trap for multi-state employers

The single most repeated line about these laws is that you no longer have to mail anything. For a firm with employees in more than one state, that line is wrong, because the federal rule does not let all applicable large employers stop distributing forms in every state. Several state individual mandates run on their own rules, and some of them still require a statement to reach the resident.

California requires active delivery of coverage statements to residents and does not adopt the federal request-only method. A website notice does not satisfy the state. New Jersey is blunter still. It requires a 1095 form for each primary New Jersey resident enrollee by March 2, 2026, and it says plainly there is no request-only option. States may still require separate form delivery to resident enrollees even when federal furnishing relief applies. Rhode Island directs employers, including out-of-state employers, to furnish 1095-B or 1095-C to Rhode Island residents. Massachusetts runs a separate track through its own Form MA 1099-HC, furnished to residents each year. The District of Columbia ties its statement requirement to federal compliance, so its treatment tends to follow the federal rule rather than override it.

The practical takeaway is a split policy, not a single switch. You can use the federal request-only method for employees in states with no individual mandate. For workers who live in a mandate state that demands delivery, keep mailing or securely delivering the statement. One national process that assumes request-only everywhere will quietly break state law in California and New Jersey. Employers that offer health coverage across state lines should document which state rules still require active delivery.

Your move before the March 2026 deadline

Turn all of this into a short list your team can run this filing season. Confirm you are an applicable large employer for the year, based on whether you crossed 50 full-time-equivalent employees in the preceding calendar year, and verify the employer identification number you will use on 1094-C and 1095-C reporting. Decide, state by state, where request-only delivery is allowed, where forms may be furnished electronically, and where you must still use paper delivery.

Draft and post the website notice with the required contents, calendar it to go live by March 2, 2026, and set a reminder not to remove it before October 16, 2026. File Forms 1094-C and 1095-C with the IRS on the normal schedule, using electronic filing and submitting forms electronically where required. Then lock your retention policy at six years forward and indefinite for pre-2024 years, and store the affordability and measurement evidence next to the forms, checking the IRS instructions for additional guidance. Do those six things and you capture the mailing relief without walking into the longer audit tail that came with it.

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