Do you have an Affordable Care Act reporting requirement?
Even if you don’t offer insurance to your employees, you still have reporting requirements through the Affordable Care Act.
This applies to producers who have 50 or more employees, or have fewer than 50 employees and a self-funded health care plan. Such enterprises are designated “applicable large employers” (ALEs) and are required to provide forms to employees by Jan. 31. Forms must then be provided to the IRS by Feb. 29 if paper-filed or March 31 if e-filed.
Applicable Large Employers. A businesses is considered an ALE if it has 50 or more full-time equivalent employees. What does that mean? Adam Kantrovich with Michigan State University Extension says full-time equivalent employees include not only the people who work an average of 30 or more hours each week on your operation, but also the total hours your part-time employees work, divided by 30.
For example, if three part-time employees each work 15 hours a week, that comes to a total of
1.5 full-time equivalent employees.
Forms To File. Farmers who qualify for ALE status are required to file forms 1094-C and 1095-C for tax year 2015, says Tonya Rule, senior tax manager for tax accountancy Eide Bailly.
Farmers must file the paperwork even if they meet the Mid-Size Employer Transition Relief.
Failure to file can yield substantial penalties. Rule says they range from $50 to $250 per 1094-C and 1095-C. A cap of $3 million is in place for businesses with average annual receipts above $5 million.
For others, penalties are capped at $1 million.
Avoid Penalties By Writing These Deadlines Down
Jan. 31: Employees must be provided with a copy of the 1095-C paperwork
Feb. 29: Forms 1094-C and 1095-C must be filed with the IRS if paper-filing
March 31: Forms 1094-C and 1095-C must be filed with the IRS if e-filing