The Internal Revenue Service (IRS) is currently issuing Letter 226-J to certain applicable large employers (ALE) – generally those with at least 50 full-time employees, including full-time equivalent employees, on average during the prior year – it believes owe a penalty for failing to comply with the Affordable Care Act’s employer shared responsibility provisions (‘Pay or Play’ provisions).
Employers have the opportunity to respond before the ‘Pay or Play’ penalty assessment. In conjunction with Letter 226-J, employers will receive Form 14764, which they can use to respond to Letter 226-J. Employers who submit Form 14764 to the IRS will generally receive one of 4 letters back:
• Letter 227-J: acknowledges receipt of Form 14764 and the employer’s agreement to pay the penalty;
• Letter 227-K: acknowledges receipt of Form 14764 and shows that the penalty has been nullified;
• Letter 227-L: acknowledges receipt of Form 14764 and shows that the penalty has been revised; or
• Letter 227-M: acknowledges receipt of Form 14764 and shows that the penalty amount did not change.
Check here for additional information about IRS ‘Pay or Play’ penalty letters.
For more information on this and other industry topics or Valley Benefit services, please contact:
Nick Bauer
Employee Benefits Consultant
(715) 598-4412
[email protected]
While this communication may be used to promote or market a transaction or an idea that is discussed in the publication, it is intended to provide general information about the subject matter covered and is provided with the understanding that Valley Benefits, LLC is not rendering legal, accounting, or tax advice. It is not a marketed opinion and may not be used to avoid penalties under the Internal Revenue Code. You should consult with appropriate counsel or other advisers on all matters pertaining to legal, tax, or accounting obligations and requirements
