Information Regarding ERISA Compliance and Health Plan Audits

Penalty Increases for 2025 Returns

Under the Internal Revenue Code Sections 6055 and 6056, the IRS Revenue Procedure 2023-34 included updated penalty amounts that may apply to reporting entities that fail to comply with the Affordable Care Act’s (ACA) requirements. Changes apply to 2024 information returns and individual statements that are required in 2025.

Penalties

Failure to comply with Section 6055 and Section 6056 may be subject to reporting penalties for:

  • Failure to file correct information returns (under Code Section 6721); and
  • Failure to furnish correct payee statements (under Code Section 6722).

Penalties may be waived if failure to file and furnish are due to reasonable cause, or may be reduced if corrective actions are made.

Adjusted Penalty Amounts

For 2024 returns filed and furnished in 2025, adjusted penalty amounts are the following:

  1. The penalty for failure to file an information return or provide an individual statement is $330 per return or statement (increased from $310);
  2. Returns corrected within 30 days after the due date, or statements corrected with 30 days after the required furnishing date, will still be subject to a penalty of $60 per return or statement;
  3. For returns or statements corrected after 30 days but before August 1st, 2025, the penalty is $130 per return or statement (increased from $120); and
  4. Failing to file a corrected return or statement due to intentional disregard is $660 (increased from $630). This penalty may be larger, as it is equal to the greater of either the applicable amount or 10% of the aggregate amount of the items to be reported correctly.

Individual statements for 2024 must be submitted within 30 days of January 31st, 2025. The deadline falls on a weekend; therefore, the individual statements must be submitted the following business day, March 3, 2025. Electronic IRS returns for 2024 must be filed by March 31st, 2025.

 

The IRS provides an information return penalties webpage as well as additional resources. If you have any questions regarding returns, please contact your dedicated Creative Benefits, Inc. team.