IRS Instruction 8928 – IRS Forms, Instructions, Pubs 2026 – In the complex world of tax compliance for group health plans and employers, IRS Form 8928 plays a crucial role. This form is essential for reporting specific excise taxes under Chapter 43 of the Internal Revenue Code (IRC). Whether you’re an employer, plan administrator, or sponsor dealing with health plan requirements, understanding the instructions for Form 8928 can help avoid costly penalties. This article breaks down the purpose, filing requirements, taxes covered, and step-by-step guidance based on the latest December 2025 revision. We’ll cover everything you need to know to stay compliant in 2026.
What Is IRS Form 8928?
IRS Form 8928, titled “Return of Certain Excise Taxes Under Chapter 43 of the Internal Revenue Code,” is used by group health plans, employers, and related entities to self-report and pay excise taxes for certain compliance failures. These failures relate to health coverage mandates designed to protect employees and beneficiaries. The form addresses taxes under sections 4980B, 4980D, 4980E, and 4980G of the IRC.
The primary purpose is to report taxes due on:
- Failures to provide adequate pediatric vaccine coverage.
- Violations of continuation coverage rules (COBRA-like requirements).
- Noncompliance with portability, access, renewability, and market reform requirements.
- Failures to make comparable contributions to Archer Medical Savings Accounts (MSAs) or Health Savings Accounts (HSAs).
For the latest updates, including any post-publication legislation, visit IRS.gov/Form8928. The current revision is from December 2025, reflecting adjustments for inflation and electronic filing enhancements.
Who Must File Form 8928?
Not every employer or health plan needs to file Form 8928—it’s triggered only by specific failures. Here’s who is typically responsible:
- Employers or Group Health Plans: Liable for taxes under sections 4980B (continuation coverage and pediatric vaccines) or 4980D (portability and market reforms).
- Plan Administrators or Sponsors: For multiemployer plans, they may file on behalf of the plan.
- Employers Contributing to MSAs or HSAs: Required if contributions are not comparable across eligible employees under sections 4980E or 4980G.
Exceptions include small employers (generally 2-50 employees) for certain insured plan failures, governmental plans, and church plans. If your plan had fewer than 20 employees in the prior year, you may be exempt from some section 4980B taxes.
Excise Taxes Covered Under Chapter 43
Form 8928 reports four main categories of excise taxes. Each has its own calculation method, often based on days of noncompliance or aggregate contributions.
Tax on Failure to Satisfy Continuation Coverage (Section 4980B)
This covers failures to offer COBRA continuation coverage or maintain pediatric vaccine coverage levels from May 1, 1993. Qualifying events include employee death, termination, divorce, or Medicare entitlement.
- Tax rate: $100 per day per affected beneficiary (with caps like $500 per family per event).
- Exceptions: No tax if failure is corrected within 30 days of discovery or unknown despite due diligence.
- Maximums: Up to $200,000 or 10% of prior-year plan costs for unintentional failures.
Tax on Failure to Meet Portability, Access, and Renewability Requirements (Section 4980D)
This applies to violations of health reform rules, such as removing lifetime limits, providing preventive care, or complying with mental health parity.
- Tax rate: $100 per day per affected individual.
- Special rules: Small employers with insured plans may shift liability to issuers for non-core failures.
- Waivers: Available if the tax is excessive relative to the failure and due to reasonable cause.
Tax on Non-Comparable Archer MSA Contributions (Section 4980E)
Employers must make equal contributions (amount or percentage of deductible) to all comparable employees with high-deductible health plans (HDHPs).
- Tax rate: 35% of aggregate employer contributions for the year.
- Controlled groups are treated as one employer.
Tax on Non-Comparable HSA Contributions (Section 4980G)
Similar to MSAs, but for HSAs.
- Tax rate: 35% of aggregate contributions.
- Applies to failures in comparability across eligible employees.
How to File Form 8928: Step-by-Step Instructions?
Filing Form 8928 involves general and specific instructions. Always use the latest version from IRS.gov.
General Filing Instructions
- Where to File: Mail to the IRS Center in Kansas City, MO, or use approved private delivery services.
- Electronic Options: Pay taxes via EFTPS; request direct deposit for refunds.
- Amended Returns: File a new form marked “Amended Return” for corrections or refunds.
- Signatures: Must be signed by the filer or paid preparer.
Specific Instructions by Part
- Part I (Section 4980B): Report days of noncompliance, apply rates, and note reasonable cause vs. willful neglect.
- Part II (Section 4980D): Similar structure, with minimum taxes for uncorrected failures during IRS exams.
- Parts III and IV (MSAs/HSAs): Enter aggregate contributions and calculate 35% tax.
- Part V: Compute total tax due or overpayment.
For multiple failures, use summary forms and attach details.
Deadlines, Penalties, and Interest
- Due Dates: Generally aligns with your income tax return due date (e.g., April 15 for calendar-year filers). For MSAs/HSAs, file by April 15 following the year. Extensions via Form 7004 don’t extend payment.
- Penalties: Late filing: 5% per month (up to 25%), with a $525 minimum for over 60 days late. Late payment: 0.5% per month. Waived for reasonable cause.
- Interest: Charged on unpaid amounts at federal rates.
Recent Changes and Updates for 2025-2026
The December 2025 revision includes inflation-adjusted penalties ($525 minimum), enhanced electronic payment options, and direct deposit fields for refunds. It also expands market reform sections to include newer IRC provisions like sections 9824 and 9825. Check IRS.gov for any 2026 legislative changes.
Conclusion
Navigating IRS Form 8928 and its instructions is vital for employers and health plan administrators to report excise taxes accurately and avoid penalties. By understanding the covered failures, filing deadlines, and calculation methods, you can ensure compliance with Chapter 43 requirements. For personalized advice, consult a tax professional. Download the form and instructions from IRS.gov to get started.
Frequently Asked Questions (FAQs)
1. What triggers the need to file Form 8928?
Failures in health plan compliance, such as not offering COBRA coverage or unequal HSA contributions.
2. Can small employers avoid these taxes?
Yes, for certain failures if the plan is insured and the issuer is at fault.
3. How do I calculate the excise tax?
It depends on the section—often $100 per day per person or 35% of contributions.
4. What if I overpay?
Request a refund via amended return or direct deposit.
5. Where can I find more resources?
Visit IRS.gov/Form8928 for forms, instructions, and updates.