IRS ACA Reporting Filing Corrections

There are numerous people that received the ACA information returns with the label “Accepted with Errors”. This practically means that corrections are necessary. Right now the law dictates that ALEs (applicable large employers) and the organizations with over 50 employees offer the minimum essential care coverage up to a minimum of 95% of the full-time workforce employed. This is information that has to be annually reported to the IRS. In the event that the organization chose electronic IRS ACA reporting, one of the responses that can be received is the one already mentioned. Let’s highlight what all the answers actually mean:

  • Accepted – This is obviously the expected status. It practically means that the IRS did not find discrepancies between communicated information and what is present in the internal database.
  • Accepted With Errors – Contrary to popular belief, this is not a completely bad response. The IRS practically tells you that there is a mismatch identified. Common errors normally involve TIN errors. These can happen due to various possible reasons but in most cases the correction is really fast.
  • Partially Accepted – There were errors that were identified in transmission that there was nothing that was considered to be fatal. However, there was a part of the transmission that was labeled as being unusable.
  • Processing – This is just an interim status and it means exactly what you expect it to mean.
  • Not Found – The UTID (unique transmitter ID) or the Receipt ID added to the transmission was not identified. This means the information should be double checked and then resubmitted.
  • Rejected – This is definitely the worst response possible. It means that there was an error present, the information was not sent in an appropriate format or even a combo of these two. In this case the entire ACA submission has to be replaced.

When the status received is Rejected, hopefully the submission was electronically done. If paper files are used, the actual errors are very hard to identify. Paper filing submissions also mean that penalty warnings are received later. Electronic submission is highly recommended since the turnaround time is a lot faster.

Keep in mind that when submissions ended up being rejected because of formatting and the submission was original, the employer should not state that the submissions were corrected. The correction is used to change details like coverage effective period, employee name or social security number.

When submitting corrections, this has to be indicated. There is a top right corner box that has to be checked so that the IRS can be made aware that forms were updated. The big problem is that correction submissions are normally difficult. The IRS does have specific rules about submitting the corrected forms. If there are problems and the procedure is not respected, the employer can end up with ESRP (employer shared responsibility payment) assessment.

To conclude, IRS ACA reporting filing corrections can be overwhelming and any correction is usually a hassle. It is really important that you seriously consider working with a specialist, especially in the event that some corrections are necessary.