1094-C vs 1095-C — What's the Difference?
Two forms, one filing package. Here is the plain-English breakdown of what each one does, who fills it out, who reads it, and how they fit together. If you are new to ACA reporting, this is the right place to start.
The Short Version
Form 1094-C is the cover sheet the employer sends to the IRS. Form 1095-C is the individual statement the employer sends to each full-time employee (and to the IRS). One 1094-C goes out per employer EIN. One 1095-C goes out per full-time employee.
Think of it the same way you think about 1099 filing: the 1096 transmittal is to 1099s what 1094-C is to 1095-Cs — the wrapper that tells the IRS what is in the package.
Form 1094-C — Transmittal to the IRS
Form 1094-C is filed by the employer (the Applicable Large Employer, or ALE) and is sent only to the IRS. Employees never see it. It tells the IRS three things:
- Who the employer is — EIN, name, address, contact person.
- How many 1095-Cs are being transmitted — the total count of employee statements in this filing.
- The employer's ALE status — full-time employee count per month, whether the employer is part of a controlled group (Aggregated ALE), and which transition relief, if any, applies.
If the employer is part of a controlled group, Part IV of the 1094-C lists every member EIN in the Aggregated ALE Group and their respective full-time employee counts. The IRS uses this to confirm that the §4980H penalty thresholds were applied correctly across the whole group, not just to one EIN.
Form 1095-C — Statement to Each Employee
Form 1095-C is the per-employee statement. The employer prepares one for every employee who was full-time for at least one month of the calendar year. Each 1095-C is sent both to the IRS (with the 1094-C transmittal) and to the employee (the employee uses it to confirm coverage when filing their personal tax return).
The substance of the 1095-C is on Part II, where two code columns do most of the work:
- Line 14 — Offer of Coverage code. A single letter code describing the offer the employer made to the employee that month. Common codes: 1A (qualifying offer), 1E (minimum essential coverage to employee, spouse, and dependents), 1H (no offer of coverage).
- Line 15 — Employee share of lowest-cost premium. The dollar amount the employee would pay each month for the lowest-cost self-only coverage offered. Required only when Line 14 is 1B–1E, 1J, 1K, 1L–1Q, or 1T–1U.
- Line 16 — Safe Harbor or reason no penalty applies. The code that explains why the IRS should not assess a §4980H penalty for that employee, that month. Common codes: 2A (not employed), 2C (employee enrolled), 2H (W-2 Safe Harbor).
For self-insured employers, Part III adds covered individuals — employee, spouse, dependents — with month-by-month coverage indicators. Fully-insured employers skip Part III; their insurance carrier files Form 1095-B separately.
Side-by-Side Comparison
| Question | Form 1094-C | Form 1095-C |
|---|---|---|
| What is it? | Employer transmittal | Per-employee statement |
| Who files it? | The ALE (employer) | The ALE (employer) |
| Who receives it? | IRS only | IRS and the employee |
| How many? | One per EIN per tax year | One per full-time employee per tax year |
| What's on it? | Employer identity, total 1095-C count, ALE status, controlled-group info | Offer of coverage codes (Line 14), employee cost share (Line 15), Safe Harbor codes (Line 16), Part III for self-insured |
| Deadline to IRS | March 31 (electronic) | March 31 (electronic, with 1094-C) |
| Deadline to employee | N/A | March 3 (TY2025, with automatic extension from January 31) |
| Where Thomas Ledger fits | Generated and transmitted automatically | Generated per employee; printed/mailed or e-delivered |
How the Two Work Together
The IRS reads the 1094-C first. It tells them how many 1095-Cs to expect, who the employer is, and whether they are part of a controlled group. Then they reconcile the individual 1095-Cs against that header — counts match, EINs match, controlled-group totals match.
If the 1094-C says you are filing 142 1095-Cs and the AIR system receives 141, your filing is rejected. If the 1094-C says you are not part of a controlled group but the IRS already knows you are, you get a Letter 226J asking why your numbers do not reconcile. The two forms are designed to cross-check each other; that is why Thomas Ledger generates them together rather than letting you submit one without the other.
What About 1094-B and 1095-B?
The B-series forms are the analog for non-ALE entities — typically insurance carriers reporting on the individuals they covered. An ALE files 1094-C and 1095-C. A non-ALE that provides self-insured coverage (rare, but possible) files 1094-B and 1095-B. An insurance carrier files 1094-B and 1095-B for the policies it underwrote, regardless of whether the policyholder employer is an ALE.
Thomas Ledger's ACA product currently focuses on 1094-C / 1095-C filing for ALEs. B-series support is on our product roadmap.
Common Mistakes
- Filing 1095-Cs without a 1094-C — the IRS will reject the submission. You always file the transmittal with the statements.
- Counting employees wrong on the 1094-C — the monthly full-time count drives §4980H calculations. Use the actual hours-worked test, not a headcount snapshot.
- Inconsistent Line 14 / 16 codes — Line 14 says one thing about the offer, Line 16 says something contradictory about why no penalty applies. The IRS flags these combinations algorithmically.
- Forgetting the employee copy deadline — March 3 (TY2025) for furnishing 1095-Cs to employees is separate from and earlier than the March 31 IRS filing deadline. Missing it is its own §6722 penalty.
- Treating self-insured Part III as optional — if you self-insure, Part III is mandatory. Fully-insured employers skip it; mixing the two up is a common Letter 226J trigger.