It’s true. On June 29, 2015, the Trade Preferences Extension Act became law and, unbeknownst to many, the act included a provision to amend Internal Revenue Code sections 6721 and 6722 to increase the per-employee penalties on applicable large employers for failing to properly file ACA information returns or provide payee statements. The increased penalties will apply to Forms W-2 and the 1099-series as well as ACA-required employer shared responsibility and minimum essential coverage reporting forms.
As a result of the amendments:
- The basic penalty for failure to file or furnish a correct information return or payee statement will more than double from $100 to $250.
- The standard annual penalty cap will double from $1.5 million to $3 million.
- If the failure relates to both an information return and a payee statement, the penalties are doubled to $500 per statement with a $6 million cap.
The new penalties are effective with the 2015 informational forms that must be filed with the IRS by February. 28, 2016 (or by March 31, 2016, if filed electronically), and payee statements that must be provided to employees by January 31, 2016.
Are you prepared? It’s not too late to get help and avoid hefty penalties!
If the ACA applies to you, and you don’t have a process or the infrastructure in place to gather the information you need to comply with ACA reporting requirements by early 2016, it’s not too late to get help. But, the clock is ticking and the stakes are high. For example, if you have 100 FTEs and you make no effort to comply, you could be looking at a minimum $50,000 fine.
Why risk paying high penalties?
PeopleStrategy can help simplify ACA recordkeeping and reporting requirements with our Cloud-based Human Capital Management (HCM) suite, PeopleStrategy eHCM. Featuring integrated payroll, HR and benefits (and more), eHCM captures all of the data you need for ACA compliance and stores it in a central database, making it quicker and easier to complete Forms 1094, 1095 and other ACA-required reports.
Or, better yet, Schedule a Free Demo, and see for yourself how PeopleStrategy eHCM can save you valuable time and resources, simplify ACA reporting and reduce your risk of incurring ACA penalties.