March 18, 2021
As we have written about extensively, the 2020 reporting season is the inaugural year in which certain employers with California residents are required to report to the State. Accord Systems has successfully filed with the State on behalf of many of our clients. However, a few clients had data that was causing an error message to appear related to the TIN numbers being listed in Part III of the Form 1095-C. Oddly, the federal returns with the exact same data were accepted by the IRS. The rest of this article examines the issue and what the California Franchise Tax Board is doing to correct the matter.
First, remember completing Part III of the Form 1095-C and submitting a Form 1095-C to the State of California is only necessary if the employer offers self-insured health coverage in which the employee or another individual is enrolled. When completing Part III of the Form 1095-C an employer must complete column (b) with the covered individual’s social security number (SSN) or Taxpayer Identification Number (TIN). Both an SSN and a TIN have nine digits.
There are two types of TINs that could be entered in column (b). First, a taxpayer may have an Individual Taxpayer Identification Number (ITIN) if the individual does not have or is not eligible to receive an SSN. An Adoption Identification Number (ATIN) is the second type of TIN an individual may have assigned to him/her. An ATIN is a temporary nine-digit number issued by the IRS for a child who is part of a domestic adoption where the adopting taxpayers do not have or are unable to obtain the child’s SSN. While the distinction between SSNs, ITINs, and ATINs may not seem too important, each have different allowable parameters for the nine-digits entered in column (b) in Part III of the Form 1095-C.
When dissecting SSNs and TINs the government breaks the nine-digit number into three separate parts. The first three digits when reading the number from left to right are referred to as the area. The fourth and fifth digits when reading the number from left to right are referred to as the group. The final four digits when reading the number from left to right are referred to as the serial. An SSN, ITIN, and ATIN have different parameters that must be satisfied to be accepted. Otherwise, the SSN, ITIN, or ATIN will be rejected as invalid.
For an SSN the allowable parameters are: area 001 – 665, 667 – 899, group 01 – 99, serial 0001 – 9999. For an ITIN the allowable parameters are: area – 900 – 999, group 50 – 65, 70 – 88, 90 – 92, 94 – 99, serial 0000 – 9999. For an ATIN the allowable parameters are: area 900 – 999, group 93, serial 0000 – 9999.
Unfortunately, any TIN entered in column (b) that begins with a 9 receives an error message and the Form 1095-C is rejected by the State of California's system. The State is aware of the problem and its system will be undergoing maintenance this weekend to correct the matter. We have been told the issue should be corrected by Monday March 22, 2021. If you have any questions regarding federal or State ACA reporting, please don’t hesitate to contact us.
About the author – Ryan Moulder serves as General Counsel at Accord Systems, LLC and is a Partner at Health Care Attorneys P.C. Ryan received his LL.M. from Georgetown University Law Center and his J.D. from Saint Louis University School of Law. He has distinguished himself as a leader in the Affordable Care Act arena and has written and spoken on a variety of ACA topics as it relates to compliance for companies.
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