Form 1094-C is a critical document for employers who must comply with the Affordable Care Act (ACA). It serves as the transmittal form for Form 1095-C and provides the IRS with summary-level information about the health coverage an employer offers. Filing it accurately is essential to avoid costly penalties and maintain compliance with ACA requirements.
Because of the form’s complexity and the risk of filing errors, many employers choose to work with an ACA compliance expert or tax professional to ensure accuracy. While the IRS offers an official instruction page, the information can be difficult to interpret without experience. This guide simplifies the process by explaining who must file, when it's due, how to complete each section, and what mistakes to avoid.
What Is Form 1094-C?
Form 1094-C is used by Applicable Large Employers (ALEs) to report whether they offered minimum essential health coverage to full-time employees, the number of employees covered each month, and whether they are part of an Aggregated ALE Group. It serves as the transmittal summary for all Forms 1095-C issued to employees and helps the IRS determine employer compliance with ACA provisions.
Keep in mind: Form 1094-C is not distributed to employees. It is strictly for IRS use.
Who Must File Form 1094-C?
Any employer classified as an Applicable Large Employer (ALE) must file Form 1094-C. This includes any business that had 50 or more full-time or full-time equivalent employees in the previous calendar year. If you're part of an Aggregated ALE Group-such as companies under common ownership-each ALE Member needs to file separately.
When Is Form 1094-C Due?
The IRS requires employers to meet the following annual deadlines:
- Paper filing: February 28, 2025
- Electronic filing: March 31, 2025
- Distribution of Form 1095-C to employees: January 31, 2025
Employers submitting 10 or more forms must file electronically using the IRS AIR system.
Step-by-Step Instructions for Completing Form 1094-C
Form 1094-C is broken into four sections. Here's how to approach each part correctly.
Part I - Employer Information
This section collects the employer's basic identifying information. You'll need to provide your name, EIN, business address, and contact information. If someone is filing on your behalf-such as a Designated Government Entity (DGE)-you'll fill out their information as well. Line 18 asks for the total number of 1095-C forms you're submitting with this transmittal. Don't forget to check the box on Line 19 to indicate if this is your Authoritative Transmittal (each ALE Member must designate one).
Part II - ALE Member Details
This section is where you confirm how many Forms 1095-C you're filing, whether you're part of an Aggregated ALE Group, and if you qualify for any reporting relief on Line 22. Many employers overlook Line 22, which allows you to claim simplified reporting methods-so read the instructions carefully before checking any boxes.
Part III - Monthly Breakdown
Here, you'll enter detailed month-by-month data. For each month of the calendar year, indicate:
- Whether minimum essential coverage was offered
- The number of full-time employees
- Total employee count
- Whether you're part of an aggregated group for that month
If your data is consistent for the full year, you can use the "All 12 Months" checkbox instead of filling out each line.
Part IV - Aggregated Group Information
If you're part of an Aggregated ALE Group, list the names and EINs of up to 30 other members in this section. This allows the IRS to assess whether all members within the group met their reporting obligations.
Common Mistakes to Avoid
Filing Form 1094-C isn't overly complicated, but even small errors can be costly. These are the issues that trip up employers most often:
- Missing the filing deadline
- Failing to check the Authoritative Transmittal box
- Providing incorrect full-time employee counts
- Misreporting Aggregated ALE Group membership
- Selecting the wrong certification on Line 22
Also, ensure consistency between the data on your Form 1094-C and the individual Forms 1095-C. Mismatched totals can lead to an IRS notice.
What Happens After You File?
Once your form is submitted, the IRS reviews it alongside your Forms 1095-C. If anything appears inconsistent or incomplete, you could receive a Letter 226J notifying you of potential penalties under the Employer Shared Responsibility provisions. It's important to respond quickly to this notice and provide any documentation needed to correct or contest the issue.
Penalties for Non-Compliance
Failure to file Form 1094-C, or submitting incorrect or late information, can result in significant penalties. As of 2025, the fine is $310 per return. If the IRS deems the error intentional, there's no cap on the penalty amount.
You can request a 30-day extension by filing Form 8809 before the original due date, but it must be submitted on time to be effective.
State-Level ACA Reporting Requirements
Some states have ACA reporting mandates that go beyond the federal requirements. If you have employees in any of the following states, you may need to submit additional filings:
- California
- Massachusetts
- New Jersey
- Rhode Island
- Vermont
Check with each state's tax authority to confirm what's required.
Electronic Filing Essentials
If you're submitting 10 or more information returns, the IRS mandates electronic filing through the AIR system. To get started, you'll need to:
- Register via IRS e-Services
- Obtain a Transmitter Control Code (TCC)
- Use IRS-approved software or a third-party provider The setup process can take time, so plan ahead if you're new to electronic filing.
Why Form Accuracy Matters
This form plays a key role in determining:
- Whether your business is subject to Employer Shared Responsibility Penalties
- Whether employees qualify for premium tax credits
Mistakes can result in penalties, audits, or prolonged communication with the IRS. Taking the time to fill out the form correctly-especially when dealing with Aggregated Groups-can save you time and money.
When to Seek Professional Help
If you're not sure how to complete Form 1094-C or are dealing with complex situations like multi-state compliance or controlled group reporting, it's a smart idea to consult with an ACA compliance expert. These professionals can:
- Validate your full-time employee counts
- Handle AIR system registration and submission
- Help respond to IRS penalty notices
File with Confidence: Final Thoughts on Form 1094-C
Filing Form 1094-C may seem like just another administrative task, but it has significant compliance implications. Start early, double-check your numbers, and make sure your internal data matches what you're submitting to the IRS.
If you need help at any point, don't hesitate to reach out to an ACA compliance professional. Getting it right the first time is always better than facing a penalty letter later.