The IRS recently released its draft 1094-C and 1095-C instructions for the 2021 tax year. We’ve identified the changes below.

It appears that Form 1094-C will remain the same, but the instructions do include two new codes for use on Line 14 of the Form 1095-C: 1T and 1U.

According to the draft instructions, the 1T code is for use when the applicable individual and their spouse receive a Health Reimbursement Arrangement (HRA) offer of coverage from the employer, where the affordability was determined using the employee’s primary residence zip code. It should be noted that this code excludes dependents as recipients of the HRA coverage extended.

The 1U code is similar to the 1T code but uses different criteria for determining affordability. Specifically, the instructions state that the 1U code should be used when an applicable individual and their spouse receive an HRA offer of coverage from the employer where the affordability was determined using the employee’s primary employment site zip code affordability safe harbor. Again, this code excludes the individual’s dependents as recipients of HRA coverage.

Click HERE to read full article by Joanna Kim-Brunetti, July 19, 2021.

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