ACA penalties are a reality and it's important to be prepared. The IRS gives employers 90 days to respond to Letter 226J. A Letter 226J is the initial notification from the IRS that an Applicable Large Employer (ALE) may be liable for an Employer Shared Responsibility Payment (ESRP) or tax penalty. There are a variety of reasons that an ALE may receive these penalties such as bad data, incorrect full-time employee data, coding errors or missing information.
The potential of penalties has left many employers scrambling to investigate the tax assessments or asking for extensions. Often ACA penalties can be reduced after an in-depth investigation and comprehensive response with documentation. We'll walk through the basics of the Letter 226J and share strategies on how to respond to the IRS. This eBook is intended to help answer the following questions:
- What is a Letter 226J?
- What are some reasons that result in a Letter 226J?
- What does Letter 226J look like?
- How should I respond to a Letter 226J?
- Can a vendor help respond to a Letter 226J?
ACA Penalties What You Need to Do When You Receive Letter 226J.pdf
