Identify Full-Time Employees – IRS TY 2015

An important step that you’ll want to take to prepare for ACA reporting is to identify full-time employees for each month. You’ll want to be very careful with this calculation as the IRS is very specific with how it counts full-time employees.

Full-Time Employees – Definition

IRS defines a full-time employee like so:

An employer’s number of full-time employees matters both for purposes of whether the Employer Shared Responsibility provisions apply to an employer and whether an Employer Shared Responsibility payment is owed by an employer (and the amount of that payment). An employer identifies its full-time employees based on each employee’s hours of service. For purposes of the Employer Shared Responsibility provisions, an employee is a full-time employee for a calendar month if he or she averages at least 30 hours of service per week. Under the final regulations, for purposes of determining full-time employee status, 130 hours of service in a calendar month is treated as the monthly equivalent of at least 30 hours of service per week.

Measurement Methods

The final regulations provide two measurement methods for determining whether an employee has sufficient hours of service to be a full-time employee.

One method is the monthly measurement method under which an employer determines each employee’s status as a full-time employee by counting the employee’s hours of service for each month. 

The other method is the look-back measurement method under which an employer may determine the status of an employee as a full-time employee during a future period (referred to as the stability period), based upon the hours of service of the employee in a prior period (referred to as the measurement period). The look-back measurement method for identifying full-time employees is available only for purposes of determining and computing liability for an Employer Shared Responsibility payment, and not for purposes of determining if the employer is an applicable large employer. 

The final regulations describe approaches that can be used for various circumstances, such as for employees who work variable hour schedules, seasonal employees, and employees of educational organizations.

These methods prescribe minimum standards for the identification of full-time employee status. Employers always may make additional employees eligible for coverage, or otherwise offer coverage more expansively than required.


By identifying full-time employees per month, you’ll be prepared to report the monthly full-time employee counts required for form 1094c. Keeping tracking of this will also allow you to estimate how many form 1095c copies you’ll need to issue to your ACA eligible employees.

For more information on ACA information returns filings, check out the IRS website or view our other blog posts linked below:

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.

About Author