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    IRS Penalty Letters

Understanding IRS Penalty Letter 226J

The IRS is now enforcing the Affordable Care Act based on employer responsibility reporting (1094-C and 1095-C forms). Over $228 billion in penalties has been sent from the IRS for ACA non-compliance so far.

The IRS has issued letter 226J to Applicable Large Employers (ALE) if it determines that, for at least one month in the year, one or more of the ALE’s full-time employees was enrolled in a qualified health plan for which a premium tax credit was allowed, and the ALE did not qualify for an affordability safe harbor or other relief for the employee.

How to Handle IRS letter 226J

If your company receives Letter 226J, you have 30 days to respond. The letter will inform you of your potential liability for payment. The general procedures the IRS will use to assess the employer shared-responsibility payment are described in the letter, and they also have additional information on their website: https://www.irs.gov/individuals/understanding-your-letter-226-j

Our ACA Audit tool can help you identify potential liabilities, prepare a response to IRS letter 226J, and determine how to correct any errors. Learn more about ACA Audit - CLICK HERE

Read our latest blogs about IRS Letter 226J:
How to Handle Letter 226J
How Payroll Can Help Employers Navigate Letter 226J
ACA Penalties are Real: What to do if you receive IRS Letter 226J

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Employer Shared Responsibility Payment (ESRP) Letter 226J
Learn how to interpret the letter and subsequent penalties, identify data the IRS uses to calculate ESRP, and how to respond to the letter. Tuesdays 1-2pm (CST) CLICK HERE to Register

To learn more about IRS penalty letter 226J, download our IRS Letter Guide: