As many of you are already aware, the IRS extended the reporting deadlines for the 1095 forms. Unfortunately, we are seeing an alarming trend of employers putting this particular subject on the back burner. This is not a wise decision.
According to a recent study by the payroll industry, more than half of all employers are still unclear as to whether or not they are in compliance with the ACA reporting requirements. Further research suggest that some 60 percent of employers are familiar with the new forms and are working on them but the remaining 40 percent may just be putting their heads in the sand and hoping that ACA goes away at the next election.
It’s not that simple.
Regardless of what happens in the next elections, a reversal of ACA would take time and either way, there are forms due long before that election comes. Here are our expert suggestions for ACA reporting.
Communicate Tax Form Issues to Employees
With the extension that was granted on December 28, 2015, many employers have delayed providing their employees with the necessary forms and further filing those with the IRS. The reality is that your employees still need this information in order to file their 2015 tax returns. If they don’t have the form, they need some information from you as the employer in order to complete their returns.
Keep in mind that filing their tax returns is an important thing to many of your employees as they are likely to expect a return of some sort. If we as an employer delay that process, this leads to unhappy employees.
What Can You Do?
Communicate with your employees to let them know about the extension if you will not have your 1095s done, and let them know that there is other information that they can rely on when working on their taxes for their April 15th filing deadline.
One suggestion is to prepare an FAQ or infographic to explain these items to your employees.
Some questions that you can expect are as follows:
- What is this new form?
- Why am I getting it?
- What do employees do with these forms?
- Will I owe more taxes because of it?
- How many of these will I get?
Make sure to answer these questions in a clear and easy-to-understand format. Use ordinary language and empathetic messaging
Distribute the communication through multiple channels rather than just sending a single letter out or putting one sign up in a common area. Email, postcard, online posting on a company intranet, posters in lunchrooms, and personalized letters will make sure your employees get the information they need and know your company cares about helping them understand new tax rules.
The Impact on Your Employees
Helping your employees understand new tax rules means answering their questions, making sure they know where to get information, and distributing information in multiple ways to ensure it reaches everyone. It will help avoid confusion and instill trust while letting them know you are taking your employer tax responsibilities seriously.
How PAYDAY Can Help
PAYDAY staff works hard to stay informed of new and pending tax laws and requirements, and works with clients providing the support, education, and information they need to understand and manage their payroll, tax, and human resource reporting and compliance issues. We keep our clients prepared and informed on all pay issues that apply to their businesses.