New Jersey, D.C. enact employer filing requirements

Tax Hot Topics newsletter In-state and out-of-state employers may have new 2019 Form 1095-B or 1095-C filing requirements if they have any employees who are residents of either New Jersey or the District of Columbia.

The two jurisdictions implemented individual mandates for their residents to obtain health coverage or pay a penalty. They require that employers send the appropriate Forms 1095 to each resident, but this is usually met by the IRS requirement to furnish the forms to employees. In addition, certain employers with employees who meet the specific definitions of residents in New Jersey or the District of Columbia will need to file their employees’ Forms 1095-B or 1095-C with the state or district. Additional information regarding these new filing requirements may be found on the respective websites for New Jersey and the District of Columbia.

Both New Jersey and the District of Columbia impose new reporting requirements on entities that provide medical coverage (minimum essential coverage) to a resident at any time during the 2019 calendar year, similar to the ACA’s reporting requirement under Section 6055. This reporting requirement applies to employers and plan sponsors, as well as, insurance carriers. Generally, employers who are self-insured are required to file the Forms 1095. Employers who are fully-insured are not required to file because the insurance carrier or issuer should file the required Forms 1095-B. However, employers should not automatically assume that the insurance carrier will file any required forms with New Jersey and the District of Columbia, and should confirm with the carriers. New Jersey’s filing deadline is March 31, 2020, and the District of Columbia’s filing deadline is June 30, 2020.

New Jersey and the District of Columbia have separate descriptions of the residents for whom forms need to be filed. For New Jersey filing purposes, the requirement applies to both part-year and full-year New Jersey residents. A part-year resident is defined as a primary enrollee who lived in New Jersey for at least 15 days in any month. For District of Columbia filing purposes, District of Columbia OTR Notice 2019-04 states that an individual is deemed to be a resident of the District “if that individual is an employee for whom wages were withheld and paid to the District for any period during the applicable calendar year.”

Out-of-state employers are treated the same as in-state employers. Employers must file a Form 1095 for each resident that is employed. As an example, if an employer has employees who are residents in New Jersey and the District of Columbia, they may be required to complete three separate filings with the IRS, New Jersey and the District of Columbia for 2019.

Jeff Martin
Washington National Tax Office
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Keith Mong
Managing Director
Washington National Tax Office
T +1 202 521 1554

Andy Mechavich
Washington National Tax Office
T +1 312 602 8167

James Sanchez
Senior Associate
Washington National Tax Office
T +1 202 861 4107

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