Prudent Tips on Tip Withholding

Prudent Tips on Tip Withholding

If your employees regularly receive tips, it is important to comply with the withholding requirements and pay your company’s fair share of employment taxes. Expensive penalties can be assessed on both employers and employees if the tip reporting rules are not followed.

Here‘s a brief summary of some of the requirements for federal income tax and FICA (Social Security and Medicare) withholding, as well as filing.

Income Tax Withholding 

You’re required to withhold federal income tax on an employee’s cash tips of $20 or more per month. The employee is generally supposed to report the tips to you by the tenth day of the month following the month of receipt.

Your company can elect to treat tips as supplemental wages. The tips can be reported in the regular payroll amount or subject to withholding at a flat rate of 25 percent.

FICA Withholding

If the employee’s cash tips do not exceed $20 in a calendar quarter, there is no FICA tax liability. However, any excess is subject to FICA. The same general rules apply to tips as wages. For instance, the Social Security portion of the tax applies to an annual “wage base” $118,500 for 2016 (and 2015). The 1.45 percent Medicare portion of the tax applies to all wages.

The employee’s share of Social Security tax is 6.2 percent and the Medicare portion is 1.45 percent. The same is true for the employer share of these two taxes.  

If you run a food or beverage establishment, you may be able to defray part of the cost of FICA through a special tax credit. Ask your payroll tax adviser if you are eligible for the 45B Credit, named for the section of the tax code it comes from.

Note: Reported tips are also subject to federal unemployment tax (FUTA). There are no income limits.

These withholding rules require the employer to collect income tax and FICA on reported tips unless the employee provides the necessary funds. If you can’t deduct the full amount from the employee’s regular wages – and the employee doesn’t otherwise provide the funds — the tax must be paid directly with the employee’s tax return. If you can collect only part of the amount due, apply what you collected first to FICA.

Filing Requirement

A business is generally required to file Form 8027, Employer’s Annual Information Return of Tip Income and Allocated Tips, for each establishment if: 

• Food or beverage is provided for consumption on the premises. 
• Tipping is a customary practice. 
• More than ten full-time employees are employed on a typical business day. The term “employee” isn’t limited to waiters and waitresses. It comprises everyone on the payroll, from cooks to dishwashers to musicians. 

Caution: Employees who don’t follow these tip reporting rules may be hit with a penalty equal to 50 percent of the FICA tax due in addition to paying the employer’s share of the tax.

(Source: www.bizactions.com)

Give Your Employee Handbook a Facelift

New Year, New Company

New Year, New Company

When it comes to the new year, it is common to see social media fill up with people claiming that it is a “New Year, New Me”, but how many really take that to heart? When it comes to owning a company, a new year, new me mentality can mean more than empty promises to eat less donuts. Planning on rejuvenating your company can lead to new new forms of income, along with increasing income from current endeavors. It may not even being about increasing profits as much as it is making the company run itself more effectively. Maybe you are thinking of bringing new more employees, or upgrade the equipment they use.

How capable are you of making these changes? Is it in your budget to start making improvements right away or should you hold off a bit first? While we can’t answer that complete question for you, we can help you with one important aspect of it. Vision H.R. is an outsourced payroll company that not only handles your payroll, but makes sure you stay informed about everything involving your payroll. With our regular reports, you can know exactly how much you are spending on payroll, including taxes.

Placing outsourcing payroll on your new year to-do list has a couple of benefits you should look at besides our regular reports.

• It’s easy to get started.
• It’s an affordable way to simplify running your business.
• Access to an experienced team of payroll specialist to answer your questions.

 

While this may not make a large change in the overall business, it is a good first step in changing how your company performs. It will free up time consuming responsibilities and give you room to explore more possibilities for your business. Along with payroll, Vision H.R. also has services to handle your human resource responsibilities. By taking advantage of our full range of our services, you will open new doors to all kinds of possibilities, while still being able to maintain the level of productivity your office currently has.

If you want to add some incentives to your employees for the new year such as health or retirement benefits, Vision H.R. can help to set up a benefits package that can include health insurance, dental insurance, retirement plans, and other forms of benefits for your employees. An employee is most productive when they feel they are getting more for their work. By offering them affordable health care options, you are paving the way to a more content, motivated, and productive work environment. If you do expand your company, this will help your employees to handle the extra work.

Once you have your payroll, human resource management, and benefits handled by the team of Vision H.R. you have an open path to expanding your company even further. Don’t worry about Vision keeping up with your payroll either. As your company grows, Vision H.R. will grow to meet the needs and demands of your payroll and human resource management. We are dedicated to being there every step of the way, no matter how many employees your company has. If you are ready to take the first step into the new year, then contact Vision H.R. at (877) 641-0012 or visit Vision-hr.com to get a free quote.

Payroll New Smyrna Beach

Vision HR | The Human Resource Experts

Obamacare Vs. Medicaid and Medicare

Obamacare Vs. Medicaid and Medicare

With all the talk about healthcare, obamacare, the ACA act, and medicaid, it may be easy for some people to confuse just what each one does when it comes to health insurance. For those who are not up to date on the topic of universal healthcare, Obamacare, or it’s more official name, the Affordable Care Act (ACA), is designed to help people get healthcare at an affordable price. It’s goal is to make quality insurance coverage more available for more citizens in the United States. Many mistake the Affordable Care Act as an attempt to supply free healthcare insurance, when in reality it simply makes it more affordable.  

So what is the difference between the ACA and the other government sponsored healthcare programs called Medicaid and Medicare? We will break down each of the three and specify what each one is designed to accomplish in comparison to the other.

ACA: As we mentioned earlier, the Affordable Care Act (ACA) is designed to make healthcare more affordable for more American citizens. It accomplishes this by creating laws that prohibit an insurance company from dropping your coverage if you become sick or injured, eliminate the possibility of being charged more because of a pre-existing condition or discriminatory reason such as gender, and protect against unjustified hikes in insurance rates. There are, however, penalties for not having health insurance under the Affordable Care Act. If you do not have health coverage, and make more than a certain amount a year, you have to pay a fine on your taxes. It also requires that large scale employers offer health insurance coverage to their employees.

Medicaid: Medicaid, in contrast to Obamacare, is not designed for anyone to take part in. Medicaid is designed to offer either free, or low cost health care coverage to those in need. While the ACA is done through the federal government, Medicaid is handled by the state, meaning the laws and regulations depend on your location. Those who are eligible for Medicaid include:

• Pregnant Mothers: If you are having a child, regardless if you are married or single, you may qualify for medicaid for you and your child.

• Parent of a Minor: If you have a child already born and is under the age of 18, you may qualify for medicaid coverage depending on your financial situation, or if your child requires nursing home care or home care due to a sickness, medicaid may be able to help as well.

• Disabilities: If you are blind, deaf, or otherwise physically disabled, you may be eligible to apply for medicaid. This is also extended to elderly individuals who can not afford the premiums associated with medicare.

• Low Income Individuals: If you do not fall under any of these circumstances, you may still be able to qualify for medicaid if you are in a low-income situation.

 

Medicare: Medicare is a program designed  to help people over the age of 65, along with some younger individuals who have certain disabilities. While you may have to pay a premium, the main cost of your Medicare is paid for through your working years. Part of what is taken out of your paycheck each week now is what pays for your Medicare once you reach retirement age. Currently, Medicare benefits come in four parts.

• Part A: Hospital Care. This part pays for time spent in a medical facility.

• Part B: This part covers tests and procedures, meaning what happens to you while in the hospital or medical facility. Part B coverage requires a premium.

• Part C: Done as an alternative to normal Medicare coverage, Part C is known as Medicare Advantage plans, offer the benefits of Part A, B, and D, and are administered through private insurance companies.

• Part D: Part D covers prescription drug coverage. Part D is a required benefit of Medicare, unless you obtain it from a different source.

 

If you don’t have health insurance, or want to extend the possibility of offering health insurance to your employees, Vision H.R. can help set up health insurance packages that include basic health, vision, or dental coverage. We can also help you understand how medicare is taken from your employees paychecks so you can better explain it to them. These are just a small part of the services offered by the Vision H.R. team. We also offer payroll services, human resource management, staffing solutions, and management training for places like Daytona Beach, New Smyrna Beach, Deland, and Lake Mary. Contact us at (877)- 6412-0012 or visit vision-hr.com for a free quote today.

Daytona Health Insurance

Vision HR | The Human Resource Experts

Figuring Out Payroll

FIGURING OUT PAYROLL

A person has to do what it takes to survive, unless you own a business of course. Then you have to do what it takes for you to survive along with your employees. How do you make sure that you have enough to make it while also making sure your employees are taken care of? It’s a difficult system to create with payroll being such a regular expense with so many requirements surrounding it. Even if you outsource it to a company like Vision H.R. that handles Daytona Beach, Ormond Beach, and Deland, and Deltona Payroll services, you still have to decide how much of your revenue to dedicate to payroll, and how to schedule your employees. The final decision isn’t just how much can you pay your employees, it’s also how productive you want your employees to be.

A satisfied employee is a productive employee. Incentives keep an employee working hard, which doesn’t always mean giving them extra. Just giving them a decent wage and decent hours will keep most employees happy. When an employee is being productive, he is making your company more money. They are getting more sales, creating more product, helping more people, giving you a greater return for your investment in them. So when it comes to managing payroll, you need to make sure you can afford to keep them working using the basic cost vs. result formula, (cost of wages and expenses of an employee vs. the revenue made from their work) it’s imperative to make sure they are also in a spot that they will not lose productivity.

This is why you need a payroll model that has a sound foundation yet has room to adapt as needed. There are different business models that many people use to decide their payroll. Some stick to a direct sales percentage, meaning they use a certain percentage of their overall sales to pay employees. For example, they decide they will use 16% of their sales to use for payroll. If they made $250,000 in sales that year, $40,000 of it will be used for payroll. Other companies follow a pure adaptive business model based on what work is needed to be completed and how much revenue is expected to be received from it.

A few larger companies can tend to break payroll down even further, planning schedules and pay scale for different jobs. For instance, in a retail store a cashier may be more needed than a stocker, so more of the payroll will go to the cashiers. Other companies try to keep wages the same regardless of position, adjusting wages according to time spent with the company and the work done instead of the need of a position.

With all these possibilities, it can be difficult to determine which business model of payroll is best for your own business. While Vision H.R. can not make the final decision, they can use their knowledge of payroll along with their experience helping numerous other clients in helping to decide the best way to do your payroll. If you just started your business, or are looking at restructuring your payroll, make a smart choice and get a free quote from Vision-hr.com.

Deltona Payroll Services

Vision HR | The Human Resource Experts

The Elections and You

The Elections and You

It is a time of political uncertainty in America as we enter an election like never before. The race to the oval office use to be just politicians and their promises. This time around though, we have politicians, celebrities, and corporate powerhouses in the running, and even a popstar promising to run for 2020. With all this variety in presidential candidates, the only thing that we can count on is it being an interesting race. The question you need to ask though, is how is this going to affect your business? Bernie Sanders, a popular candidate, believes that “anyone who works a 40 hour work week should not live in poverty”. This indicates some kind of change being made to either how American are being paid, getting taxed, or directly influencing the cost of living.

Of course, this change will be gradual with the elections still being in just the campaigning stages. However, once the changes do start coming, you are going to have three options when it comes to dealing with the changes. You can either try and keep up with them yourself, put your payroll in the hands of an competent payroll company like Vision H.R., or fall behind and deal with the consequences.

Even without the elections happening, payroll laws and regulations are always subject to change. Sometimes they are sudden and noticeable, like a raise in the nation’s minimum wage, while others are small and can easily slip right by without being noticed. Some may be for a business of a certain size and not even concern you. The important thing to remember is that regardless of what the change is, it is important to make sure that your company is implementing it into your payroll. Otherwise small change can turn into an expensive fine that you don’t want to pay. This is where Vision H.R. becomes a valuable asset to any company. Instead of trying to learn and understand payroll laws and regulations while trying to run your business at the same time, you can pass the work off to Vision H.R. Being a payroll company, their job is to stay current with new trends and regulations so you don’t have to.

Another important item to remember is that just because something a president does is not directly affecting your payroll, it may call for an increase or decrease in the amount of taxes taken from you and your employees, or can end up affecting how much your company is making. If anything changes on the price of oil for instance, it will also affect how much money some gas stations are making, which can move on to affect an employee’s wage and hours. You have to be able to make these adjustments to your payroll in a timely manner, or you may end up with some aggravated employees.

Luckily, any change to laws and regulations have to go through a process before getting approved and going into effect, so there is time to implement them into your company without needing sudden changes in most instances. This also gives Vision H.R. time to explain to your any changes that have to be made to your payroll so that you can stay on top of your company and feel confident in what is happening in your payroll.

Regardless of who you are voting in as president in 2016, it is important to make sure you are prepared for any changes that they may make. Stay up to date with Vision H.R., a experienced Palm Coast payroll services company.

Contact Vision H.R. at (877) 641-0012 or visit Vision-hr.com for a free quote today.

Palm Coast Payroll Services

Vision HR | The Human Resource Experts

2016 ACA Appliance

 

2016 ACA Appliance

It may only be October, but November 1st starts open enrollment for a 2016 health care plan under the ACA, and you only have until January 31st before the enrollment period ends. If you want to get enrolled in a health care plan, you either need to be registered by January 31st or have some form of exception that extends the time you have to enroll, which we will talk about further into this article. If you are a business owner, it is recommended that you make this information easily accessible for your employees, either through a newsletter or through a physical medium such as memos or at an office meeting. If you have your own health care plan they can enroll in, rather through yourself or set up by a company such as Vision H.R. make sure they know how to get enrolled in it.

When it comes to enrollment, the earlier the better. The sooner you get enrolled, the sooner your coverage will take effect. If you wait until the last minute, you may find your health care plan not taking effect until March 1, 2016. To learn the important dates associated with early enrollment, see below.

November 1st: Open Enrollment Begins.

December 15th: Last day to enroll in a health care plan to have it begin by January 1st.

January 1st: Coverage for people who enrolled by December 15th begins.

January 15th: Last day to enroll if you want your plan to take effect on Feb 1st.

January 31st: Last day for enrollment.

February 1st: Coverage begins for People who enrolled between December 16th and January 15th.

March 1st: Anyone who applied after January 15th has their coverage start today.

(It should be noted that insurance programs such as Medicaid, CHIP, and SHOP have no limited enrollment period)

There are some exceptions that will let you enroll after the cut-off date. These can include marriage, having a child, or losing another form of coverage. If you fail to enroll within the deadline, and don’t meet one of the special exceptions, the fine for not having a health care plan in 2016 is expected to be more than the one in 2015. In 2014, the fine was $95 per adult and $47.50 per child, up to $285 for a family, or 1% of your household. In 2015, it is going up to $325 per adult, $162.50 per child, to a maximum of $975 or 2% of your yearly household income, depending on which is higher.

If you have questions on a workplace based healthcare plan, or about the fees associated with not having a healthcare plan in effect, Vision H.R. have experts waiting to assist. Vision H.R. can answer your questions, help set up a company healthcare plan, and show you how to relay the information to your employees. For a free quote, or for more information, visit us at VisionHR.com.

Affordable Care Act Appliance

Vision HR | The Human Resource Experts

Social Media in the Office

Social Media in the Office

We all know someone who is always on Facebook, you may even be someone who is always on Facebook, and that’s not necessarily a bad thing, even if you’re at work! That’s right, this article is going to advocate using social media in the workplace, but don’t get too excited, we are going to list a few negatives in there as well. The trending world lives and breathes two words, Mobile and Social. If we can’t watch it, share it, or take a selfie with it, we get bored of it rather quickly. Social Media, noticeably Facebook, Twitter, and Instagram have all evolved in the recent years from a friendly platform to keep in contact with friends, to a full blown business venture, to the point it could be argued that a company may live or die depending on their Social media presence.

So knowing how prominent social media is in the modern business world, the question comes up about how to better regulate and implement Social Media usage in the office. Of course employees can’t be taking selfies when there are customers waiting to talk to them, but what about between customers or duties. If an employee has no customers present or is not in the middle of an important project, should you tell them to put the phone away, or turn a blind eye? The best answer here is to do both.

Recent studies performed have shown that limited social media privileges can actually boost both productivity and morale in a work environment, but only to a limit. You know how a workday can affect the mind, working eight hours focusing on a single project, sometimes we need a distraction. A quick scroll through our friend’s Instagram photos is a easy way for our mind to catch a break. We can change our focus for a few moments and clear our mind so we can return to the job with new energy and perspective, but what if we take more than a few moments?

Studies also show that too much freedom with social media and smartphone usage can begin to deter a person from completing their job, and this is when it comes time for you as a business owner to step in, or have a manager do so for you. While this may mean a little more work on your end, there are more benefits to allowing social media into the office to consider that we will talk about.

Benefits of Social Media in the Office

 

• Productivity: We spoke earlier about how social media can increase productivity by giving us a small distraction, lifting morale as well.
  Helpful Articles: Having a company Facebook account that your employees can see is a great way to share articles and news stories that are relevant to the job.
• Reviews: Along with having a company Facebook for articles, social media accounts are also great ways for employees to have access to reviews and comments made by customers, presenting grounds to see how they can improve.
• Unify the Office: With Facebook, employees can be more connected to each other, creating a more familiar work environment, along with open new channels for communication between employees.

 

Of course, each company would have different standards and regulations for social media usage at work. A store or restaurant would have more limits on it’s usage than an office due to the amount of customer interaction, whereas someone working in an office environment with a PC would have more opportunities to take a quick media break, as long as they don’t abuse the privileges. While these things must be regularized, it is important to note there are some practices that should be avoided.

Things to Avoid

 

• Blocking Pages: If your company uses a wifi that your employees can use, don’t block pages that are popular such as social media sites or media entertainment sites such as YouTube or Vine. This can cause an employee to have a claustrophobic feeling with their job. (Blocking websites with explicit or adult content is however, perfectly fine).
• Taking Devices: Demanding an employee hands over their device can make an employee feel discontent, and make an manager or business owner look controlling or dominating, creating an unwelcoming feeling work environment.

 

If you are ready to open your company to the social media generation, it may be time to teach your managers a few new things to go with it, this is where a company such as Vision H.R. can help. Along with offering payroll and human resource management services, Vision H.R. also specializes in management training, including how to interact with employees well keeping current with new trends. Visit the Vision H.R. website for a free quote, and check their news page for more articles with helpful information and ideas for running your business.

Management Training

Vision HR | The Human Resource Experts

Affordable Care Act Exceptions

 

Affordable Care Act Exceptions

An entire series of books can be written about the A.C.A. (Affordable Care Act), with one of them being about the controversy caused by it alone. Many people cheered when the Affordable Care Act was signed into law, other people panicked, and a small few had no opinion either which way. A big part of the panic was caused by not fully understanding what the A.C.A. was or how it actually worked. The Affordable Care Act was designed to help the American people gain access to affordable health care either on their own, through employment, or through government assistance. Not everyone can afford healthcare, and this lead many to worry that they will incur a fine if they can not afford it, unaware that there are exceptions that protect them from the fines associated with not having a healthcare plan.

These exceptions are for more than just those who can not afford a healthcare plan, they also cover other specific situations that we will talk about as well. If you own a company and have an employee that is worried about how the Affordable Health Care plan is going to affect them, the information listed below, along with the information you receive from your human resource department on the subject, can help place their mind at ease. We have spoken extensively before about how stress and distraction can negatively impact a work environment in other articles such as Resolving Conflict, where we talk about how stress can lead to fighting between co-workers and reduced productivity.

So how do you know if you qualify to be exempted from the Affordable Care Act? If you fall under one of the following situations, you can breathe a bit easier, though we would still recommend you look at healthcare options, which we will supply links at the end of the article to help you with.

A.C.A. Fine Exceptions

• If you are uninsured for less than three months out of the year, you will not face a fine for the time spent uninsured.
• You show evidence that you can not afford coverage, meaning that a “bronze” or basic policy exceeds 8% of your income.
• Your total income for the year was too low to be required to file taxes.
• You qualify for medicaid under the new income limits established by the Affordable Care Act but the state you live in has not expanded its medicaid eligibility yet.
• You are a member of a federally recognized Indian tribe. The federally recognized Indian tribes of Florida are listed below.
  • Seminole Tribe of Florida
  • Miccosukee
• You are a member of a health care sharing ministry.(ex. Christian Healthcare Ministries )
• You are a member of a recognized religion that objects to healthcare.
• You are not a legal citizen of the United States.
• You are incarcerated (serving a prison sentence).

This gives a wide safety net to people with low income employment, or other objections to the Affordable Care Act, and hopefully will relieve some of the tension caused by the passing of the bill. If you have more questions about the Affordable Care Act, contacting a Human Resource company such as Vision H.R. can help you understand what all the Affordable Care Act includes, how to implement it, and how to make sure your business structure is compliant with it.

For a free quote from Vision H.R. click Here

Affordable Care Act 

Vision HR | The Human Resource Experts

Ensure Your Departments Are in Sync to Comply with the ACA

 

 

Ensure Your Departments Are in Sync to Comply with the ACA

Except for in very small companies, payroll, human resources and employee benefits are generally handled by separate offices. However, compliance with the Affordable Care Act (ACA) and the need to file certain forms may make it necessary for the three functions to cross over, to some degree.

“Regardless of which department is ultimately tasked with the responsibility for completing the forms, it is clear that they will have to work together because each department will probably control the system housing some of the data that must be reported,” states the IRS in its publication SSA/IRS Reporter.

Employer Requirements

Under the ACA, applicable large employers must offer their full-time employees and their dependents minimum essential coverage that is affordable and provides minimum value.

An applicable large employer is defined as one having 50 or more full-time and full-time equivalent employees. The IRS states in Notice 2013-45, “Employers will use information about the number of employees they employ and their hours of service during 2014 to determine whether they employ enough employees to be an applicable large employer for 2015.”

For 2015, health coverage is considered affordable if the amount of the premium paid by the employee doesn’t exceed 9.56% of an employee’s household income.

Of course, employers don’t often know an employee’s actual household income. For that reason, there are safe harbors in place including one that deems that coverage is affordable if it’s equal to or less than 9.5% of the employee’s wages (listed on Form W-2, Box 1). Under the ACA, a health plan meets the minimum value requirements if it covers 60% of the cost of benefits expected to be incurred. Otherwise penalties may be incurred.

Potential Penalties

There are two types of penalties that applicable large employers are liable for if they don’t comply with the coverage requirements.

1. If an applicable large employer doesn’t offer coverage, or offers coverage to less than 95% (reduced to 70% for 2015) of its full-time employees and their dependents and at least one employee receives a premium tax credit, then the employer is subject to the Employer Shared Responsibility payment. This is calculated by multiplying the number of full-time employees by $2,000, with an exclusion for the first 30 full-time employees (increased to 80 for 2015).

2. If an applicable large employer offers coverage to 95% or more (reduced to 70% for 2015) of its full-time employees and their dependents, but there are full-time employees that receive a premium tax credit because the offered coverage was not affordable or did not provide minimum value, then the employer will be subject to a second type of Employer Shared Responsibility payment. In this case, the payment will be $3,000 per employee that received the premium tax credit.

It is important to note that both of the penalties are calculated on a monthly basis.

Fortunately, there are two kinds of transition relief. Following are the transition rules that apply for 2015.

For applicable large employers with 100 or more full-time employees, the relief is in the form of a lower percentage of full-time employees who must be offered coverage or a larger exclusion of full-time employees subject to the $2,000 penalty. For applicable large employers with 50 to 99 full-time employees, no Employer Shared Responsibility payment will be due even if the coverage requirements are not met. However, these employers are still subject to the ACA reporting requirements.

Since ACA penalties are calculated monthly, applicable large employers must be able to track their full-time employees for each month as well as their corresponding health coverage status. This is critical in 2015 because various indicator codes will be used on the forms to claim the applicable transition relief.

The Information Employers Need for Forms 1094/1095

An applicable large employer will generally file two ACA forms:

1. Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, will work like a Form W-2 with copies going both to the IRS and full-time employees. To complete Form 1095-C, employers must report the following information, for each full-time employee, broken down by month:

Information about the offer of coverage to each employee,

Whether the employee was enrolled in the plan,

The employee’s share of the lowest-cost self-only minimum value coverage, and

Whether the affordability safe harbor or other transition relief applies.
2. Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns, will function like a Form W-3. To complete an authoritative transmittal on Form 1094-C, employers must report:

Whether coverage was offered to 95% (70% for 2015) of the organization’s full-time employees,

The total number of 1095-C forms the organization issued,

The number of full-time employees and total number of employees by month,

If applicable, information about members of the aggregated employer group, and

Whether the organization qualifies for transition relief.
For calendar year 2015, the forms are due by February 29, 2016 (or March 31, 2016 if filing electronically).

An applicable large employer that has different divisions may file a 1094-C for each entity, but one must be marked as an authoritative transmittal and provide data on all the Forms 1095-C filed by the employer.

A Joint Effort

The IRS stresses that a company’s payroll, HR and benefits departments will have to work together to assemble the large amount of data needed to file Forms 1094-C and 1095-C.

For example, the payroll department will have the information on W-2 wages or rate of pay needed to determine the affordability of the offered coverage if the employer relies on one of the available affordability safe harbors. HR or Benefits will likely have the data on the lowest-cost self-only minimum value coverage that was offered by the employer.

The HR department may have the data to determine whether a newly hired full-time employee was in a waiting period before an offer of coverage was made, while a time and attendance system may be used to determine whether an employee who has shifting schedules qualified as a full-time employee throughout the reporting period.

Your payroll and tax advisers may be able to assist you in compiling the information and may offer services to compile and file the forms. Contact them early to help ensure you have the correct information to meet the filing deadline.

(Source: Bizactions)