Prepare Affordable Care Act (ACA) reporting documentsAs of January 2016, employers are required to file information returns with the IRS and provide statements to their full-time employees about the health insurance coverage the employer offered. The fundamental purpose of these documents and reporting is to demonstrate that health care coverage was offered to all eligible full-time employees. Employers with fewer than 50 full-time employees and a self-insured plan must file forms with the Internal Revenue Service (IRS). This page on the IRS website provides information about which forms are required, depending on the size of the company (1095-B and 1094-B for businesses with fewer than 50 full-time employees). The Society for Human Resources Management (SHRM) provides a helpful summary of what employers need to do, including these important dates for the 2016 Tax Year ACA Reporting Deadlines:
- January 31, 2017: Forms 1095-B and 1095-C due to employees (to be postmarked if mailed, or sent by e-mail if applicable conditions met).
- February 28, 2017: Forms 1095-B and 1095-C due to employees (to be postmarked if mailed, or sent by e-mail if applicable conditions met).
- March 31, 2017: Forms 1094-B, 1095-B, 1094-C and 1095-C due to IRS if filing electronically. (Any employer filing more than 250 information returns during the calendar year must file these returns electronically. For employers with fewer than 250 returns, electronic filing is voluntary.)
Get ready for your final few payroll cycles this year and prep for next yearBefore you issue the final payroll of the year, it’s important to ensure that all records are up-to-date. Verify the employer and employee data that is used in processing your quarterly tax reports and W-2s, including:
- Employee names and Social Security numbers are in the correct format (the IRS may impose a penalty for each Form W-2 with a missing or incorrect Social Security number or employee name.
- Proper withholding has been made for taxable fringe benefits (e.g., for bonuses, third-party sick pay, etc.). If not, it needs to be withheld from the final paycheck for taxable fringe benefits.
- Employee W-4 is current and up-to-date (remind all employees to fill out a new Form W-4 if their situation has changed).
Make sure 401(k) notices are readyIf you currently have a 401(k): The 401(k) plan sponsor is responsible for ensuring that its plan is in compliance and must also meet IRS filing requirements. If the required returns aren’t filed, or if they are filed late, penalties may apply. After October 3, 2016 and before December 1, 2016, plan administrators must provide safe harbor notices to participants and beneficiaries if the plan is expected to use safe harbor ADP/ACP testing for the 2017 plan year. The following notices are also due:
- Notice of qualified automatic contribution arrangement
- Notice of eligible automatic contribution arrangement
- Notice of automatic contribution arrangement
- Notice of qualified default investment alternatives
- Check with your 401(k) provider to see if they’ll help you with any of these or other required forms!
Remind employees about remaining funds and vacation daysFor this year:v
- Remind employees to spend any remaining flexible spending account (FSA) balances before the end of the year to avoid forfeiting any leftover funds.
- Inform employees if they have any paid time off they must use before December 31 to avoid losing any accrual or carryover balances. (Note: confirm state laws to ensure what’s allowed for forfeiture of accrued paid time off.)