IRS Code 1094C-028 is triggered when there is an error in the reported total employee count on Form 1094-C. This is a critical aspect of ACA reporting as it affects an employer’s assessment for ACA compliance and potential liabilities.
Impact of Incorrect Total Employee Count
Accurate reporting of the total employee count is essential for:
- Determining the employer’s status as an Applicable Large Employer (ALE) under the ACA.
- Assessing eligibility and obligations under employer shared responsibility provisions.
- Ensuring accurate calculation of potential penalties for non-compliance.
Common Causes of Incorrect Employee Count Reporting
Errors in reporting total employee counts often arise from:
- Misclassification of employees, misunderstanding full-time equivalent calculations.
- Technical errors in data transfer from payroll services to ACA reporting platforms.
- Lack of coordination between human resources and payroll departments.
Corrective Steps for Accurate Employee Count Reporting
To address discrepancies highlighted by Code 1094C-028, employers should:
- Review and verify the accuracy of employee classification and count across all departments.
- Update any erroneous data on the Form 1094-C and resubmit it to the IRS with the correct information.
- Enhance internal processes for data collection and reporting to prevent future errors.
Resources for Ensuring Compliance
To aid in compliance and improve accuracy in reporting, employers can utilize tools like ACA-Track. For further assistance:
- Visit the Official IRS website for comprehensive ACA reporting guidelines.
- Check the Common 1094-C error codes page for additional insights into avoiding and correcting reporting errors.
