What to Do if My Business Gets an ACA Penalty in 2024?

Receiving an ACA (Affordable Care Act) penalty notice from the IRS can be stressful, but it's important to know what steps to take to address it. Here’s a simple guide to help you understand what to do if this happens.

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Step 1: Don’t Panic and Read the Notice Carefully.

The first thing to do is to carefully read the penalty notice. This notice, usually called a Letter 226J, will explain why the IRS believes your business owes a penalty under the ACA. It will include:

• The tax year in question.
• The proposed penalty amount.
• A detailed explanation of the basis for the penalty.

Step 2: Verify the Information.

Check the information in the notice against your own records. Look for any discrepancies, such as:

• Incorrect employee counts.
• Misclassified full-time employees.
• Errors in reported offer of coverage.

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