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ACA Reporting Is Required and Strictly Enforced by IRS
Brad Smith • Sep 06, 2019
As the fiscal year closes the employers have many queries regarding the status of the Affordable Care Act (ACA) Reporting. It is questioned every time the tax filing season looms. The answer to all these queries is that Yes! ACA is still the law and employers who tend to ignore their obligations towards ACA reporting can face some heavy penalties.
Employers Must Prepare and Report ACA Forms
Many employers have the misconception that requirements for ACA reporting are optional. The confusion is triggered by the current administration's ongoing efforts for repealing and replacing the ACA. A further misconception is caused by the Tax Cuts and Jobs Act has been passed in late 2017. This tax legislation modified the individual mandate which required individuals to have ACA compliant health coverage. It was done by removing the penalty for non-compliance. However, this doesn't come into effect until the end of 2019. And more importantly, the employer mandate still holds its standing. This means all affected employers must file 1095-C reporting forms and provide copies to employees before the deadlines assigned by the IRS. The most affected employers are those who have 50 or more full-time employees and hold the status of Applicable Large Employers (ALEs). According to the new Tax Act, ACA reporting for employers remains unchanged.
Stronger IRS Enforcement Efforts Underway
Although in the past IRS has been a little lenient with the ACA reporting violations but this won’t be the case anymore. IRS has finished working on a sophisticated system which is designed to enforce the rules and target the employers who don’t comply with the annual reporting requirements or employer shared responsibility payment.
The IRS first sends out Letter 5699 which states that the IRS believes that an employer was an ALE but ignored to provide the proper ACA information. It asks the employer for confirming the name used for filing. It also asks for the date the ACA information returns were submitted to the IRS and the Employer Identification Number (EIN). Then the IRS sends out Letter 226J for notifying the employers of any penalty assessments. Until now, more than 30,000 letters have been sent out and issuing of fines over $4 billion.
You must keep in mind that missing the deadlines for completing and filing the ACA forms can cost you almost $270 per return and an intentional disregard can cost you around $540 per return. Although you may file Form 8509 for filing with the IRS for a 30-day extension.
ACA Reporting Help Is Available
It is critical to stay on track with the increased penalties for non-compliance and due to the IRS strongly following through with the enforcement. If you are an employer and are facing difficulties regarding filing with IRS or if you can’t figure out where you should start then you
should consider seeking professional help. Who’s Where
is a firm dedicated to helping employers regarding ACA Reporting
and Payroll Data Aggregation. If you want to schedule a session for discussing a potential partnership of if you want to contact us then feel free to do so anytime.
Once employers have familiarized themselves with the ACA obligations, they should also know of the penalties associated with non-compliance. Identifying and paying for full-time employees is fairly easy because of the straightforward details of their job but for variable hour employees’, it is not as simple. Some organizations make use of the ‘limiting’ strategy to manage such schedules but this strategy as its own set of problems. Problems such as workforce scheduling and variable labor requirements are factors that make this strategy impracticable. We’ve combined some of the best ways to ensure ACA compliance in this article and examined how ‘guidance’ can help you limit penalties.
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Handling compliance with the Affordable Care Act - If you're the one in charge for handling compliance with the Affordable Care Act (ACA) reporting and audits then read on; those who aren’t compliant will face penalties from the IRS.
Due to the complexity of the process, utilizing a reputable software vendor to file your 1094/1095 data electronically with the IRS is considered to be a best practice. One reason for this is that if it turns out that there’s a problem with some of your ACA data, the IRS doesn’t necessarily make it easy to figure out what went wrong.
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We are dedicated to helping our clients navigate the complexity of ACA and employee eligibility reporting. Below you will find information regarding whether or not all employers are required to e-File with the IRS.
The past few years have brought forth a great deal of uncertainty surrounding the Affordable Care Act. The topic of ‘repeal and replace’ was front and center during the 2016 presidential and congressional elections, and 2017 saw several attempts at repeal, none of which were ultimately successfully at scrapping the law in its entirety.
About us
Points North, established in 1994, is a nationally recognized software company located in Duluth, Minnesota. The Points North team has been dedicated to providing companies of all sizes with the best compliance, reporting, and data aggregation solutions. We focus on learning about the needs of your company and customizing our products specifically for your requirements. Our products include ACA Reporter, Certified Payroll Reporting, Who’s Where, Attendance Advisor, and EEO Reporter. Through our partnerships, software, and customer support we create an experience that is seamless and predictable.
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