IRS Code 1094C-045-02 is issued when there is a discrepancy in the employee count reported for Applicable Large Employer (ALE) members on Form 1094-C. Accurate employee counts are critical for determining ALE status under the Affordable Care Act (ACA).
Significance of Accurate ALE Reporting
Accurate determination of an employer’s ALE status is essential for compliance with ACA’s employer mandate, which requires ALEs to offer minimum essential coverage to at least 95% of their full-time employees and their dependents. Incorrect reporting can lead to incorrect assessments of penalties.
Corrective Actions for Code 1094C-045-02
- Review your employee counts to verify their accuracy. Ensure all full-time and full-time equivalent employees are correctly classified and reported.
- Amend your Form 1094-C with the correct employee data and submit the updated form to the IRS.
- Provide any additional documentation requested by the IRS to verify your ALE status.
Preventing Future Discrepancies
To prevent future discrepancies and ensure compliance:
- Regularly review your employee classification processes to ensure accurate counting and reporting.
- Implement internal audits to check compliance before submitting your annual ACA reporting forms.
- Utilize ACA compliance software that can assist in accurately tracking and reporting employee counts and ALE status.
Further Assistance
If you require further help with ALE calculations or any other aspect of ACA compliance, consider visiting ACA Track’s FAQ page or consulting with an ACA compliance expert.
