Remember the days of “Good Faith Relief” for ACA reporting? That time where the IRS understood there might be some bumps on the road as businesses adjusted to the Affordable Care Act’s Employer Mandate? Well, those days are officially over. Announced by the IRS, the end of Good Faith Relief means businesses are now solely responsible for accurate and timely reporting – and the potential consequences for non-compliance can be a real financial blow.

Why the Shift?

The initial “Good Faith Relief” period was intended to ease businesses into the new regulations and allow for some flexibility during the implementation phase. Now, several years in, the IRS expects employers to have a firm grasp on their ACA reporting obligations. This shift also reflects the importance of ensuring everyone plays by the rules. Accurate reporting helps maintain a fair and balanced system within the ACA framework.

What Does This Mean for Your Business?

In simpler terms, it means taking ACA reporting seriously. Here’s a breakdown of what you need to be aware of:

• Penalties with a Bite: Gone are the days of leniency for minor errors. Businesses that haven’t filed the required forms (1094 and 1095) or haven’t filed them correctly could face significant penalties. We’re talking potentially six-figure fines that can put a serious dent in your bottom line.
• Focus on Common Mistakes: The IRS is keeping a close eye on specific areas where errors tend to occur. Some common pitfalls include:
  • COVID-19 Confusion: Did you skip filing during the pandemic because of lower employee counts? Be aware that there may still be filing requirements depending on your specific situation.
  • Employee Count Miscalculations: Misjudging your total number of full-time and full-time equivalent employees can lead to non-compliance if you fall under the ACA threshold.
  • Multi-Business Owners Beware: If you own multiple businesses, it’s crucial to combine employee counts across all entities to determine your overall ACA obligations.

Taking Action: Don’t Wait for the IRS

Proactive steps are key to avoiding potential headaches down the road. Here’s what you should do first:

• Check Your Filing Status: Don’t wait for the IRS to contact you. Take the initiative and verify that you’ve filed all the necessary ACA forms for all applicable years. Based on what we’re seeing, the agency is currently auditing and inspecting filings for tax years 2021 and 2022. Resources from the IRS website can guide you through the process.

If you’re unsure about your filing status or suspect there might be an issue, don’t hesitate to seek professional help. Our experts at MP are ready to help you navigate these ACA changes. Talk with an expert today! In the next blog post, we’ll delve deeper into some of the common mistakes businesses make with ACA reporting and explore strategies to ensure you’re compliant and avoid penalties. Remember, staying informed and taking action can save you significant time, money, and stress in the long run.

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