When it comes to employee TINs, some errors seem inevitable, but they don’t always mean what they seem. As an Applicable Large Employer (ALE), it is your duty in accordance with the Affordable Care Act to offer minimum essential coverage to at least 95% of your full-time employees. Form 1095-C filings are designed to ensure that is happening or else face penalties, and as of the 2015 tax year, these filings were required to conducted electronically should there be more than 250 forms.
On that form is the employee’s Taxpayer Identification Number (TIN), which is typically the employee’s social security number. When the IRS scans Form 1095-C for errors, employee information must match up on the government system or else a bounce back message will occur (for name and TIN matching errors it is “AIRTN500”), notifying you that there is an error in information. So what happens next? Here are some DO’s and DON’Ts.
DON’T Assume your employee willfully provided incorrect information. There are many systems and databases in place to check for inaccurate TINs and name recognitions. It’s inevitable that margins of error can occur.
DON’T Assume it means your employee is, therefore, undocumented and unable to work in the United States. Anti-discriminatory laws are in a place where succumbing to assumptions can lead to further problems.
DON’T Ignore error messages. While the aforementioned can just be misunderstandings inform filings, deciding not to act at all can cost you money in penalties in the long run.
DO Understand that reasonable cause should be shown for having those errors in the forms, i.e. The Social Security card was incorrect, etc, and there is a timetable for establishing reasonable cause.
DO Take measures if it’s found that your employee willfully provided false information, but only if your state allows for it.
DON’T Accuse your employees once informed of those errors. Anti-discrimination laws can come into effect, so I-9 verification a second time around will allow for other documents to be presented to confirm the correct name and TIN.
DO Meet the 2016 Form 1095-C filing deadline and if there are any TIN errors, be able to provide a reasonable cause.
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