TIN Validation Failed and How To Correct for ACA (1095) Reporting
“TIN Validation Failure” seems to be by far the most common error reported back from the IRS Efile system for ACA (also called AIR). Many employers are experiencing this issue, even when they believe they have provided what they believe to be accurate Name/TIN data. Below, is our most up to date guidance on how to handle this issue. Please check back as we add more info on how to resolve this issue expediently and compliantly.
What is a TIN?
Taxpayer Identification Number. When referring to an employee or individual, this is commonly their social security number (SSN).
How do I know which name or TIN on the form is incorrect?
Unfortunately, the IRS does not provide specific information on TIN validation errors. The only information that is provided is the name and TIN of the recipient, however the TIN validation error could be the name/TIN combination for the recipient, or a covered individual of the recipient, or both. Since it is impossible to know which name/TIN combination caused the error, it will be necessary to validate all name/TINs for both the recipient and covered individuals as applicable. Also note that if you find that the name/TIN field on the recipient is incorrect, you may also need to correct their information in the Covered Individuals section.
Note that for dependents, rather than using SSN (TIN), we can use a valid Date of Birth (DOB).
Follow these steps to ensure you have met all requirements to obtain the correct Name/TIN information:
- Check your records (HR/Benefits, Payroll data) to verify that all Name/TIN combinations are correct.
- Contact the employee or employer to validate the Recipient Name/TIN Combination and Covered Individuals Name(s)/TIN(s).
- Check with the sponsoring employer or responsible individual to validate the name/TIN information.
- Check with your employee to validate the name/TIN information
- Contact your local Social Security Administration (SSA) office to determine if your information matches SSA’s information. Once you have identified the incorrect Name/TIN fields and have obtained the correct data, contact us securely to make the correction.
What if I can’t resolve a TIN issue?
You may be unable to resolve a TIN issue if you can’t reach a particular employer or individual to validate their TIN or obtain their date of birth. It is also possible that you have taken all required steps and believe that your data is accurate. In these cases, make sure you have documented your process thoroughly to avoid potential fines and penalties. The IRS has outlined the following process for 1095 forms:
- Make an initial solicitation of Recipient and Covered Individuals’ TINs at an individual’s first enrollment or, if already enrolled by September 17, 2015, the next open season.
- If you do not receive the TINs, make the second solicitation at a reasonable time thereafter.
- If TINs are still not provided, make a third solicitation by December 31 of the year following the initial solicitation. You are not required to solicit a TIN from an individual whose coverage is terminated.
What is the deadline to correct TIN Validation errors?
You should correct your forms as soon as possible. You will have until November 1, 2016 to correct your 2015 forms.
Relevant guidance from the IRS from May 2016:
The above link has a video and transcript of the IRS guidance around returns corrections for the ACA. Of specific relevance is the following guidance taken directly from the IRS transcript (emphasis ours) :
“Errors or omissions that are never inconsequential include TIN and/or surname of the recipient or other covered individuals.
In addition, it is never inconsequential if the return furnished to the recipient is not the appropriate form or an appropriate substitute.
There is also an exception to the penalty for a de minimis number of failures to include correct information if the filer corrects that information by August 1st of the calendar year, to which the information relates, or November 1st for 2016.
For a calendar year, this penalty will not apply to the greater of 10 information returns or one half of 1% of the total number of returns the filer is required to file or furnish.
Additionally, filers may be subjected to increased penalties for intentional disregard of the requirement to file and furnish timely and accurate information returns.
For additional information on the exceptions and the intentional disregard standards, see publication 1586.
Finally, there is only one penalty per record, even if the record has multiple errors, such as incorrect TIN and incorrect months of coverage.
There is relief for 2015 returns filed in 2016.
As previously mentioned, the IRS will not impose penalties for filing incorrect or incomplete information returns, including TINs or date of birth, when reporting entities show they made good-faith efforts to comply.
However, this relief is not available for returns that are not timely filed.”
Our take: Document your effort to comply! As your ACA Services Provider and Transmitter, all of your company’s correspondence, data, and documentation with ACA Prime is stored securely and is available to you to demonstrate your effort to comply.
- Contact the IRS directly at: 800-829-4933