IRS Releases Requirements for 2016 ACA Reporting
One of the requirements the Affordable Care Act has for applicable large employees is to report to the IRS under IRC Section 6056. Every ALE member is required to carry this out. While one does not have to report for 2014, it is required to report for 2015 beginning in January of 2016.
Who Qualifies as an ALE
An ALE is generally defined in IRC Section 4980H as an employer with at least 50 full-time employees on average for the prior calendar year. Every employer that is treated as a single employer under the rules of IRS aggregation are treated as such for figuring out ALE status. Each person that makes up the ALE is known as an ALE member. The definition and the definition used for employer responsibilities and regulations are identical.
The Use of ALE Reported Information
The purpose of the information as reported by members of the ALE is for administering compliance with the shared responsibilities of the employer. The compliance of the individual’s tax credits for the Marketplace is also determined. The ALE member will give the reported individual a statement. The information reported to the IRS is included in the statement.
The Final Rule
A final rule was issued by the IRS in regards to the ALE reporting in March of 2014. The IRS also offers a fact sheet. ALE members are encouraged to read through the rules until they can understand the impact of the reporting requirements. Employers have professionals that they can contact if they have specific questions that need clarity.
The Information to Report
It is the responsibility to every ALE member to report each and every full-time employee. The information included in the form should include the name, address and the EIN for each ALE member. Provide the name and contact information of the contact person of the ALE member. The calendar year must be included in the report.
Other Bits of Information to Include
The ALE member must include a certification of the plans offered to the full-time employees as well as those dependent on them. He must also include the months of the year where the coverage was offered. The employee’s share in the monthly premium for self only for each month should also be provided.
Employee Related Information
The ALE must provide the number of full-time workers for every month of the year. The name and contact information as well as taxpayer identification number should be provided for the time the employee was covered. There are also other forms of information that is specifically requested in the forms.
Employees and the Statements Required
ALE members are to make sure each full-time employee has a statement with a name, address and EIN of the ALE member. The individual information reported to the IRS must also be listed above that information. The key is to know how to report the information to avoid getting penalized with an audit.
The way To Report Tax Information
It is a lot like the other IRS information reporting that employers require. The information has to be reported to two groups of people. The IRS has to receive the report as well as the employees. It is important for the employees to receive this information if they are full-time or the equivalent.
Providing Full-Time Employees with Statements
Full-Time Employees will receive 1095-C statements. There may be another form as specified by the IRS. Form 1094-C will be used to transmit the employee information to IRS. There are drafts of these forms available for the purpose of review. Draft instructions are expected to be published later in the month with finalized instructions later in the year.
250 Filings, or More
If an ALE member files more than 250 tax forms in the year no matter what type it is, they should be filed to the IRS electronically. The only exception is if the member has a waiver for hardship. Contracts can be made between a third party and an ALE member in order to handle the reporting. However, the responsibility remains with the ALE member for reporting.
Self-funded employers are also required to provide reports in regards to the minimal essential coverage according to IRC Section 6055. One thing an employer can do for alternative methods is offer a qualifying order for each employee that works full time. Employees who receive offers for the whole year only need their names reported.
Credit for this small business article goes to NECHES FCU, Port Neches, TX.
Neches FCU is a Texas Credit Union with a long history of service to it’s wide base of members.
Their core objective is one of “Ultimate Member Satisfaction.”
They are well-known for an enthusiastic work atmosphere, delivering a memorable service experience, and where members are known by name.