The first step in preparing for ACA reporting is identifying all of your common law employees.
Common Law Employee
The IRS defines an employee as anyone who performs services for you if you can control what will be done and how it will be done. This includes when you have given the employee freedom of action. They are considered your employee if you have the right to control the specifics of how their services are performed.
For example, an experienced car salesperson may work at an auto dealer under minimal supervision in closing and financing sales. However, because they work a certain number of hours on an assigned schedule, require management approval for trade-in appraisals, and must report to a superior, they would be considered an employee of the auto dealer.
Once you have identified common law employees, you can keep track of whose information you require for ACA eligible employees. This will help you begin the process of calculating totals for your Form 1094-C.
ACA reporting requirements also state that all eligible employees must receive copies of their Form 1095-C by mail.
After identifying your common law employees, the next step in preparing for ACA reporting is calculating your monthly number of full-time employees.
Need More Information?
For more information on Form 1095-C filing, please view the IRS Instructions or check out our other blog posts linked below:
- Identify full-time employees
- Employer Shared Responsibility
- Determine a contact phone number
- Affordability Safe Harbors
- Identify Covered Individuals and gather information
- Import Spreadsheet Format Guidelines
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BoomTax, The Boom Post, and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors prior to engaging in any transaction.