The IRS recently updated one of their Q&As to outline their upcoming issuing of ACA penalty demand letters.

According to question 55 of the Q&A, employers will receive Letter 226J if the IRS determines at least one full-time employee received a premium tax credit to enroll on a health plan through the exchange. Letter 226J will contain the name and contact information of a specific IRS employee that the ALE should contact if the ALE has questions about the letter.

The letter will include:

• A summary table itemizing each month an employer may be liable for a payment
• A response form, Form 14764, “ESRP Response”
• Form 14765 which will list by month an ALE’s assessable full-time employees
• A description of actions the ALE employer should take to dispute the letter’s findings.

The Letter 226J will include a due date for the employer’s response, which will generally be 30 days from the date of the letter. If an employer doesn’t respond or doesn’t respond timely, the IRS will issue a notice and demand for payment, Notice CP 220J.

Samples of the letters and forms are not yet available for review. However, the IRS states that the Letter 226J for calendar year 2015 will be issued in “late 2017.”

See below to review the updated Q&As and contact your NEEBCO representative with questions.

IRS ACA Q&A

IRS Issues Pay or Play Guidance