1099 Tax Software Blog

The April 26, 2016 IRS webinar says

The apostrophe is not allowed in AIR.

• However the escaped apostrophe (&apos) is allowed except in an
Individual’s name.
• For example, if a record has a last name data field containing an apostrophe, such
as “O’Malley”, the transmission cannot include the apostrophe or the escaped
apostrophe characters. The apostrophe must be stripped and the last name data
must be entered as “OMALLEY”. The transmission will be rejected, if the
apostrophe is used.

Please reinstall the 1904/1095 software from this link

https://www.1099fire.com/try_now.htm

Reinstalling will give you the most current version that can handle foreign employee mailing addresses.

1. Form 1095-C.  The employee address section looks like the following:

Type in or import in the best, most complete address you can.  In Box 5 State or province, type the 2-character province code only if the employee address is from Canada (CA).  If they are from any non-US country other than Canada, leave the province field empty.  The list of Canadian province codes are here

Alberta AB
British Columbia BC
Manitoba MB
New Brunswick NB
Newfoundland and Labrador NL
Northwest Territories NT
Nova Scotia NS
Nunavut NU
Ontario ON
Prince Edward Island PE
Quebec QC
Saskatchewan SK
Yukon YT

In Box 6, type the 2 character country code in the 1st box and the zip code in the 2nd box.  A list of country codes is here.  Blank means US so if they do have a US mailing address, just leave the 1st field in Box 6 blank.  US is also acceptable.

Click on File Information Returns Electronically and you will see this:

By default, the software assumes you have all US mailing addresses when efiling.  Its easier and faster to assume US mailing addresses. If you have employees with foreign mailing addresses, then put a check in the check box “Foreign Recipient Addresses” and the software will review each employee country code (which is the 1st field of Box 6).  Blank or US means the recipient has a US mailing address.  Any country code other than blank or US and the software will use the ForeignAddressGrp XML code.

2. Form 1095-B.   The employee section of IRS Form 1095-B looks like the following:

Again, type in anything you like in the City.  Type in a 2-character province code only if they are from Canada.  Type in the 2 character country code.

AIRTIN500 – TIN Validation Failed is a common error from ACA e-filing.

TIN Validation Failed means that the last name and SSN of a 1095 record that you transmitted does not match IRS records.  It could be the employee name and SSN is not matching IRS records but it could also mean that one or more of the covered individuals of that employee is not matching. The IRS specifies which 1095 record is in error but doesn’t specify which name/SSN is not matching.

You need to correct TIN Validation errors.  Tax year 2015 is the non-penalty year and the IRS starts off nice by ‘Accepting With Errors’ files with TIN validation errors.  From experiences with other information returns, the IRS starts off nice and they gradually move toward:

1. Asking the employer or payer to withhold money from the recipient and send that money to the IRS until the name/SSN matches IRS records or,
2. Penalizes payers who do not have a name/SSN that matches IRS records.

There are steps to take to correct TIN validation errors.  The first step is to double check the W-9 form and contact the employee.  Is the last name spelled correctly?  Is the SSN correct? Does the last name include hyphens (I have tried TIN matching with and without hyphens and have found that missing hyphens can cause a name to mismatch)?  Commas and periods are invalid characters of an individual or business name and eliminated before efiled. Did the person get married recently and has a new last name?  Go back to the employee or business you are working with and keep asking questions and we can run TIN matching to see if the name/TIN matches IRS records.

I remember TIN matching a business with the name ‘Greater Business Association’ and it did match IRS records.  We ran interactive TIN matching many times trying ‘Greater Business Association of Atlanta’ and ‘Greater Business Association of Georgia’ and many other variations of these names.  None matched!  Finally, we tried GBA (just the initials) and it matched which means that the initials is what the IRS has on record for that particular business.

I also remember TIN matching my brother’s name/SSN and it did not match IRS records. My own brother! I followed up and found out that he gave me the EIN for his local business instead of his SSN.  This is a common error.  Small business owners oftentimes use their business EIN and their name (which wont match IRS records) instead of their business name and EIN or individual name and SSN.

You have to make a good faith effort to correct TIN validation errors.  It takes time and the more mismatches you have, the more time you have to spend following up with employees, researching and TIN matching. But the time invested now will pay off.  The IRS always starts nice and tax year 2015 is the non-penalty year for ACA efilings.  But in time, the IRS will move away from niceness and the names and SSNs to match IRS records.

Updated June 15, 2016. Please reinstall the 1094/1095 software from this link

https://www.1099fire.com/try_now.htm

Reinstalling will give you the most current version that can prepare replacement and/or corrections.

Corrections are used to update an information return that was previously filed and Accepted (with or without errors) by the IRS, but contained erroneous information.  Corrections can fix errors reported by IRS or those discovered by Filers
independently. If a file is rejected by the IRS, you put together a replacement file.

Replacements: Transmitters can replace submissions which were rejected.  Its easy to do.

Prepare a new file.  Click on File Information Returns Electronically and a box will pop up. In the top left corner you will see this:

Select Replacement from the Transmission Type. Type in the Original Receipt ID that you received when your file was rejected.   That’s it.  You can now create the data file and manifest file and upload these replacement XML files.

Corrections: Corrections can be made to previous submissions that have been Accepted or Accepted With Errors.  If you transmit a file and it comes back as Accepted but later realize you transmitted erroneous data, you need to efile corrections as soon as possible.  Accepted With Errors will list your errors.  You can clean up your data and transmit a correction.

You only want to correct data which is erroneous.  If you submitted 100 records but 1 record had an error, you prepare a correction for this one record in error and transmit that. The IRS states “The Transmitter must furnish corrected statements (physical paper forms) to recipients as soon as possible” which means you have to print and mail a new 1095 form to the employee.

You can not transmit originals and corrections in the same file.  Corrections must be separate from original transmissions.

There are different types of corrections and we discuss each below.  We go from easy to hard in our discussion of correction types and follow up with examples.  If you have questions, ask anytime.  Technical support can be reached at support@1099fire.com and (608) 444-6575.

1094-B Corrections: Form 1094-B is the transmittal summary to the 1095-B forms.  If you look closely, the 1094-B form does not have a void or corrected check box at the top of the forms. You can’t paper file or efile corrections for IRS Form 1094-B.

1094-C Corrections: Form 1094-C is the transmittal summary to the 1095-C forms.  You can efile a correction for the 1094-C forms.

Here are the steps.

1. Do not include 1095-C records.

Put together an excel file with no 1095-C records and update the 1094-C data as much as you like. Import in the 1094-C data.

2. Select 1094-C Transmission Type.

Click on File Information Returns Electronically and you see a screen which looks like this

Select Correction (1094-C Record) as the Transmission Type.   Type in the Original Receipt ID that you are trying to correct. Type in the original payer name and original payer EIN.  If you transmitted a file and the original payer name or payer EIN was incorrect, type that incorrect information in here.  The Receipt ID, Original Payer Name and EIN helps the IRS pinpoint which 1094-C record to correct.

3. Efile.  Create the manifest and data file and transmit to the IRS.

1095-B, 1095-C Corrections:

Let’s consider an example as we go through 1095-B, 1095-C corrections.

1. Identify the errors. The most current IRS Test Scenario #3 has employees for the business Selitestthree. The correct data is:

Let’s make an intentional mistake and upload Teresa Southern with the SSN 111-00-0350.  We transmit and get these results:

Receipt ID: 1095C-16-00041297
Status: Accepted with Errors
AIRTN500 TIN Validation Failed

TIN Validation Failed means the name/TIN combination does not match IRS records (which for this case is true).  We can download the error report from the IRS and see

<UniqueRecordId>1095C-16-00041297|1|1</UniqueRecordId>
<ns2:ErrorMessageDetail>
<ns2:ErrorMessageCd>AIRTN500</ns2:ErrorMessageCd>
<ns2:ErrorMessageTxt>TIN Validation Failed</ns2:ErrorMessageTxt>
</ns2:ErrorMessageDetail>

I know, it looks confusing but this

1095C-16-00041297|1|1

means Receipt ID | 1094-C ID | 1095-C ID.  In more detail,

   Receipt ID is 1095C-16-00041297
   1094-C ID is 1 always (In theory, you can submit a data file with the 1094-C followed by its 1095-C records and then another 1094-C and its 1095-C records.  But with our software, we only submit one (1) 1094-C per data file and it’s followed by it’s 1095-C records.  So the 1094-C ID is always 1 or the 1st 1094-C in the data file.)
   1095-C ID of 1 (1st record is the error in this example.  If the 15th 1095-C had the error, then you would have typed 15 here.).

Together,

1095C-16-00041297|1|1

is the CorrectedUniqueRecordID.  Our first step is to identify the records that are in error and retain these CorrectedUniqueRecordIDs.

2. Prepare a subset of corrections.  Prepare a new excel file to import into the software.  Make changes to this subset of records.  If the SSN was incorrect, change it on this subset.  If the Plan Start Month was invalid, correct it now.  Make any and all changes you every wanted to make to these records that you are correcting.

To the far right of the excel file, add 6 extra columns namely First, Middle, Last, Suffix, TIN and CorrectedUniqueRecordID.  The far right columns will look something like this:

The IRS webinars say:

Key data fields from the original record to be correct, e.g. Recipient Name
and TIN. Note these fields are necessary to allow the IRS to associate the correction record even when the Unique ID’s don’t match.

If you had an incorrect name or incorrect TIN, type that in these extra columns so that the IRS can match up the incorrect name/TIN that was already submitted with what the IRS has on file.

3. Import the data into the software.

4. File 1095-C Corrections along with a 1094-C without with only Part I on the 1094-C completed.

Go to the 1094-C and Box 18 on the 1094-C.  Box 18 represents the number of records you are transmitting right now.  If you transmitted 3 employees and one 1 record is erroneous and you want to correct that one record, type 1 in Box 18 on Form 1094-C.  That represents the size of this small excel file.  Only complete Part I on the 1094-C.  Your not efiling a 1094-C correction; just 1095-C corrections.  A 1094-C correction would be a separate file/transmission.

5. Click on File Information Returns Electronically and a box will pop up. In the top left corner you will see this:

Change the Transmission Type from Original to 1095-B or 1095-C Correction.

That’s it.  You can now create the data file and manifest file and upload these correction XML files.

If your correction comes back as Accepted, your done.  If your correction comes back as Accepted With Errors, then you still have errors in that correction.  You can submit another correction.  Submit as many corrections as you like.

The electronic submission process does not have a void option. You can, however, use the correction process to change data that was incorrectly filed on IRS Form 1095-B or Form 1095-C or to void a record.

Using the Correction Process to change data from an incorrectly filed 1095-B:

1. Check ‘CorrectedInd’

2. Revise Part IV to remove all covered individuals that were reported on the previously-accepted 1095-B and do not include the ‘CoveredIndividualGrp’ tags

1095-B Example Scenario: BBBB Insurance Company files a 1095-B for George Catoctin showing George and his three children were covered all year. After sending the return, they find that George should not have been sent a return since no one was covered during the tax year.

Remedy:  BBBB Insurance Company would correct this issue by sending a Corrected 1095-B to both George and to the IRS, removing George and his three children from the ‘CoveredIndividualGrp’ (leaving Part IV blank). When filing electronically, do not include ‘CoveredIndividualGrp’ tags.

Using the Correction Process to remove the record of coverage from an incorrectly filed 1095-C:

1. Check the ‘CorrectedInd’

2. Revise Part II to align with the [former] full-time employee’s actual status data

3. Uncheck the ‘CoveredIndividualInd’ checkbox

4. Revise Part III to remove all covered individuals that were reported on the previously-accepted 1095-C and do not include the ‘CoveredIndividualGrp’ tags

1095-C Example Scenario:  XYZ Plumbing files a 1095-C showing John Whitney, their Employee, was offered coverage and that John and his wife were covered all year. After sending the return to IRS, XYZ discovers that John had left the company in December of the previous year and that the 1095-C was sent in error.

Remedy:  XYZ would correct this issue by sending a Corrected 1095-C to both John and to the IRS with Part II and Part III filled out as follows:

• Line 14 would show Code”1H” in “All 12 Months” showing that John was not offered coverage.
• Line 15 would not be present, since there was no Offer of Coverage.
• Line 16 would show “2A” in “All 12 Months” showing that John was not employed during the year.
• Uncheck the ‘CoveredIndividualInd’ checkbox
• Remove John Whitney and his three children from the ‘CoveredIndividualGrp’ (Part III) and do not include the ‘CoveredIndividualGrp’ tags.

AIRMF3005 means

The value of the Manifest ‘TestFileCd’ must equal the value stored in the IRS’ database governing the status of the ‘FormsTypeCd’ .

You have to submit one communication test with the IRS.  Once you have submitted one Accepted file, you call the IRS at 866-937-4130 x1 x3 and ask them to move your TCC number from Test to Production.  If you are getting this error when submitting, your submitting a file with this XML code:

<p3:TestFileCd>P</p3:TestFileCd>

where P is Production but your TCC number is still identified as a T or Test.

1095-B: XML Schema Validation Failed on the 1095-B typically arises when someone enters the signature, title, date on the 1094-B.  The boxes are on the 1094-B form.  But if you look in the back of Publication 5165, it says:

Is the XML data tag <p1:JuratSignaturePIN></p1:JuratSignaturePIN>
required in the 2015 Form Data File?

• Signature data are not required for TY2015.
• Do not include signature information in your XML.

For tax year 2015, do not include the signature, title, date on the 1094-B and you can avoid this XML Scheme Validation error.

1095-C: Part II on IRS Form 1095-C is Employee Offer and Coverage.  A common error arises from Boxes 14, 15 and 16 that we discuss below.

We prepare and electronically file XML files to the IRS.  For Boxes 14, 15, 16, we can efile this code

<EmployeeOfferAndCoverageGrp>
<AnnualOfferOfCoverageCd>1E</AnnualOfferOfCoverageCd>
<AnnlShrLowestCostMthlyPremAmt>128.00</AnnlShrLowestCostMthlyPremAmt>
<AnnualSafeHarborCd>2C</AnnualSafeHarborCd>
</EmployeeOfferAndCoverageGrp>

Here Annual Offer of Coverage has data and Monthly Offer of Coverage does not exist.  Another way of saying this is Boxes 14, 15 and 16 have data in ‘All 12 Months’ and January through December are blank.

We can transmit this as well:

<EmployeeOfferAndCoverageGrp>
<MonthlyOfferCoverageGrp>
<JunOfferCd>1C</JunOfferCd>
<JulOfferCd>1C</JulOfferCd>
<AugOfferCd>1C</AugOfferCd>
<SepOfferCd>1C</SepOfferCd>
<OctOfferCd>1C</OctOfferCd>
<NovOfferCd>1C</NovOfferCd>
<DecOfferCd>1C</DecOfferCd>
</MonthlyOfferCoverageGrp>
<MonthlyShareOfLowestCostMonthlyPremGrp>
<JuneAmt>97.88</JuneAmt>
<JulyAmt>97.88</JulyAmt>
<AugustAmt>97.88</AugustAmt>
<SeptemberAmt>97.88</SeptemberAmt>
<OctoberAmt>97.88</OctoberAmt>
<NovemberAmt>97.88</NovemberAmt>
<DecemberAmt>97.88</DecemberAmt>
</MonthlyShareOfLowestCostMonthlyPremGrp>
<MonthlySafeHarborGrp>
<JunSafeHarborCd>2C</JunSafeHarborCd>
<JulSafeHarborCd>2C</JulSafeHarborCd>
<AugSafeHarborCd>2C</AugSafeHarborCd>
<SepSafeHarborCd>2C</SepSafeHarborCd>
<OctSafeHarborCd>2C</OctSafeHarborCd>
<NovSafeHarborCd>2C</NovSafeHarborCd>
<DecSafeHarborCd>2C</DecSafeHarborCd>
</MonthlySafeHarborGrp>
</EmployeeOfferAndCoverageGrp>

Here Annual Offer of Coverage is blank (nothing is transmitted) and Monthly Offer of Coverage has data for specific months. All months can be filled out as well or any combination combination.

But if we transmit something like this

<EmployeeOfferAndCoverageGrp>
<AnnualOfferOfCoverageCd>1E</AnnualOfferOfCoverageCd>
<MonthlyShareOfLowestCostMonthlyPremGrp>
<JuneAmt>97.88</JuneAmt>
<JulyAmt>97.88</JulyAmt>
<AugustAmt>97.88</AugustAmt>
<SeptemberAmt>97.88</SeptemberAmt>
<OctoberAmt>97.88</OctoberAmt>
<NovemberAmt>97.88</NovemberAmt>
<DecemberAmt>97.88</DecemberAmt>
</MonthlyShareOfLowestCostMonthlyPremGrp>
<MonthlySafeHarborGrp>
<JunSafeHarborCd>2C</JunSafeHarborCd>
<JulSafeHarborCd>2C</JulSafeHarborCd>
<AugSafeHarborCd>2C</AugSafeHarborCd>
<SepSafeHarborCd>2C</SepSafeHarborCd>
<OctSafeHarborCd>2C</OctSafeHarborCd>
<NovSafeHarborCd>2C</NovSafeHarborCd>
<DecSafeHarborCd>2C</DecSafeHarborCd>
</MonthlySafeHarborGrp>
</EmployeeOfferAndCoverageGrp>

Or any combination of this code where your reporting Annual and Monthly Offer of Coverage for a particular employee, then you get the error

XML Schema Validation Failed – not well formed or missing required elements

The solution is the stay consistent.  If you are reporting Annual Offer of Coverage, then only report Annual and that means you have data in Boxes 14, 15, 16 in All 12 Months only.  If you are reporting Monthly Offer of Coverage, then report Monthly and leave Annual Offer of Coverage blank.  Stay consistent.

Yes.

We can electronically file IRS Form 1095-B with the 1094-B transmittal summary and/or IRS Form 1095-C with the 1094-C transmittal summary with complete security.  Here are the steps you would want to take to have us electronically file on your behalf:

1. Contact sales at (480) 460-9311 or info@1099fire.com.  Call or email anytime.Sales can provide an estimate of the cost as well as process your order. We have very competitive pricing. Sales will also provide an account number.
2. Enter your data into the sample excel files found here

   https://www.1099fire.com/support/import/index.htm

   For the 1095-C forms, the 1094-C is the next tab or sheet in the excel file.  You have to fill out the 1094-C data as well.  Fill everything out as best you can.

3. Rename the excel file your account number and then upload the excel file using this secure sharefile link

   https://nationalsoftware.sharefile.com/r/r4605c86ea294f758

4. We will import your data and efile and email a transmission identification number and status within a few days.

We can also print, fold, stuff and mail any quantity of 1095 forms.  When we print, the 1095 forms are printed on one side and the instructions and mailing addresses are printed on the other side.  We tri-fold and stuff into a #10 size, 2 window envelope and then seal.  We can print and mail any size order.

Its confusing!

The Form Data file name looks like the following:

1094<form_type>_Request_<TCC>_<Date>T<TimeStamp>.xml

where,

<form_type> is either B or C for Form 1095-B or Form 1095-C.
<TCC> is the 5-character transmitter control code issued by the IRS.
<Date> is today’s date formatted as YYYYMMDD.
<TimeStamp> is formatted in ISO 8601 with the – removed.

To be more specific, the date and time stamp combined is

YYYY-MM-DDThh:mm:ss.sTZD

where

YYYY = four-digit year
MM = two-digit month (01=January, etc.)
DD = two-digit day of month (01 through 31)
hh = two digits of hour (00 through 23) (am/pm NOT allowed)
mm = two digits of minute (00 through 59)
ss = two digits of second (00 through 59)
s = one or more digits representing a decimal fraction of a second
TZD = time zone designator (Z or +hh:mm or -hh:mm)

Here’s an example:

2015-08-23T18:15:31.481Z => 18:15:31 and 481 miliseconds in UTC (Z)

The IRS example is: 010102000Z is 01:01:02 and 000 miliseconds in UTC (Z).

In this case, the -,:,. have been removed, since you can’t have some of these characters in a filename.