Who Files Form 8928 And When The Return Is Due
The filing deadline depends on which Part of Form 8928 is involved. The COBRA and chapter 100 taxes follow one clock and the Archer MSA and HSA taxes follow another. General information, not legal or tax advice.
Three Things To Hold Onto
Form 8928 Overview
The overview ties each Part of the return to its Code section.
Correcting The Failure
Relief claims are made on the same return, so the facts need to be ready before filing.
Who Bears The Tax
Filing duties and liability are related but not identical.
The Filer Follows The Section.
The instructions name an employer, group health plan, plan administrator or plan sponsor that is liable under section 4980B, and an employer or group health plan that is liable under section 4980D. For sections 4980E and 4980G the filer is an employer.
The when-to-file rule goes a step further and speaks of the employer or other person responsible for providing or administering benefits, such as an insurer or third-party administrator. Where that person is liable, it reports on its own return timeline.
If several qualifying events or failures occurred, the instructions call for completing a separate Part for each and attaching a summary Form 8928 marked “Summary Form”. Failures in the same tax year can be reported together.
Two Clocks, Depending On The Part.
Parts I and II, covering sections 4980B and 4980D, are due on or before the due date of the liable person’s federal income tax return. For a multiemployer or multiple employer plan the deadline is the last day of the seventh month after the plan year ends.
Parts III and IV, covering sections 4980E and 4980G, are due by the 15th day of the fourth month after the calendar year in which the noncomparable contributions were made.
Tax is due in full when the return is filed. Interest runs from the original due date, and late-payment charges are billed separately afterward.
What Extra Time Does And Does Not Buy.
Form 7004 gives an automatic extension of time to file, but it has to be submitted by the regular due date. The instructions state plainly that it does not extend the time to pay.
A late return draws a charge of 5 percent of the unpaid tax for each month or part of a month, up to 25 percent, with a minimum for returns more than 60 days late. A late payment adds one half of one percent per month, also capped at 25 percent. Reasonable cause can excuse the late-filing charge when a statement explaining it is attached.
Parts III And IV Work Differently.
Section 4980E applies when an employer contributes to employees’ Archer MSAs and does not make comparable contributions. The tax is 35 percent of the employer’s total Archer MSA contributions for the period. Contributions are comparable if they are the same dollar amount or the same percentage of the deductible, and part-time employees working fewer than 30 hours a week are tested separately.
Section 4980G applies rules similar to those of section 4980E to employer HSA contributions. When testing contributions made for non-highly compensated employees, highly compensated employees are not counted as comparable participating employees.
More Guides In This Series
COBRA Failures And The Section 4980B Excise Tax
The daily tax per qualified beneficiary, the minimums, the caps and the exclusions.
Market-Reform Failures And The Section 4980D Excise Tax
What chapter 100 requires and how the daily tax is measured.
Correcting A Health Plan Failure And Reasonable Cause Relief
What correction means and the three routes to a reduced or zero tax.
Who Bears The Form 8928 Excise Tax: Employer, TPA, Insurer And Stop-Loss
How liability splits between the plan sponsor and its vendors.
Laws And Sources
Each citation below supports a statement on this page. Statute text was read at Cornell Law School’s Legal Information Institute and IRS material at irs.gov.
IRS, Instructions for Form 8928 — Who must file, due dates, extension, payment, minimums, caps and the reasonable cause waiver.
IRS, Form 8928 — The five Parts of the return and what each one reports.
IRS, About Form 7004 — The automatic extension request the instructions point to.
26 U.S.C. 4980E — Archer MSA comparability and the tax on noncomparable contributions.
26 U.S.C. 4980G — HSA comparability, which applies rules similar to section 4980E.
26 U.S.C. 4980B — The continuation coverage excise tax, its limits and who is liable.
26 U.S.C. 4980D — The excise tax for chapter 100 failures, its limits and the insured small employer rule.
Quick Answers
Quick answers on filing, extensions and payment.
When Is Form 8928 Due For A COBRA Failure?
On or before the due date of the liable person’s federal income tax return, or for a multiemployer or multiple employer plan by the last day of the seventh month after the plan year ends. Tax is payable in full when the form is filed.
Does filing an extension delay the payment?
No. Form 7004 extends the time to file when it is submitted by the regular due date, but the instructions say it does not extend the time to pay the excise tax.
When is an HSA comparability failure reported?
By the 15th day of the fourth month after the calendar year in which the noncomparable contributions were made, using Part IV of Form 8928.
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