Navigating the complexities of Affordable Care Act (ACA) information returns requires staying informed about the latest system updates, especially for those utilizing the IRS’s AIR (Affordable Care Act Information Returns) Program. This article provides essential updates for transmitters and software developers concerning the AIR Program for the upcoming tax year 2024 and processing year 2025, ensuring compliance and smooth operations.
Key Updates for Processing Year 2025 / Tax Year 2024
For those already in production status with AIR Transmitter Control Codes (TCCs), the good news is that your production status remains valid. No additional testing is mandated for tax year 2024, streamlining the process for established users. However, it’s crucial to note that software developers must update their ACA application annually to secure a new software identification number for each tax year. This yearly update is a mandatory step to maintain system compatibility and security.
Developers who have successfully completed testing for any tax year ending after December 31, 2014, are exempt from re-testing for the current tax year. Software IDs are efficiently moved to production approximately one week after assignment, ensuring a swift transition. A vital action for responsible officials is to re-sign the ACA application for TCC when the 2024 software packages are implemented. It’s imperative to ensure this step is completed; AIR transmissions, both live and test, will be rejected if the ACA application for TCC is not signed and marked as completed. After passing any required testing, it is advisable to allow a 48-hour window before initiating transmissions to the production environment.
AATS (Acceptance Testing System) Environment for Processing Year 2025
The AIR system will accommodate tax years 2015 through 2024 for processing year 2025. The programming for processing year 2025 within the AATS environment commenced on November 1, 2024. Crucially, all manifest files, whether current or for prior years, must adhere to the TY2024 schema package. Similarly, all form data files for TY2024 must utilize the TY2024 schema package when generating Forms 1094/1095-B or Forms 1094/1095-C.
For prior year returns (TY2015 through TY2023), the latest schema package specific to that tax year should be used for the form data file.
Production Environment for Processing Year 2025
Mirroring the AATS environment, the production system for processing year 2025 also supports tax years 2015 through 2024. Production programming for processing year 2025 was launched on January 13, 2025. The schema package requirements are consistent with AATS: all manifest files (current and prior) must use the TY2024 schema package, and all TY2024 form data files require the TY2024 schema package for Forms 1094/1095-B and 1094/1095-C.
For prior year returns spanning TY2015 to TY2023, ensure you employ the most recent schema package designated for that specific tax year for the form data file.
Example for Tax Year 2021 Returns:
When dealing with TY2021 returns:
- Utilize the latest TY2021 schema package to generate the form data file for Forms 1094/1095-B or Forms 1094/1095-C.
- Set the PaymentYr value to “2021”.
- Set the PriorYearDataInd value to “1”.
- Use the Software ID for 2021 (Software IDs for 2021 begin with 21XXXXXXXX).
By adhering to these guidelines, transmitters and software developers can ensure accurate and successful submissions of Affordable Care Act information returns through the AIR Program. Keeping these updates in mind is essential for maintaining compliance and avoiding processing errors.
