IRS Letter 226-J: the employer shared responsibility payment letter.
Letter 226-J is different from Letter 5699. It proposes an employer shared responsibility payment based on the returns you filed and your employees’ tax filings.
What the IRS says.
What It Is
The IRS manual states Letter 226-J is issued for potential employer shared responsibility payment cases, based on Forms 1094-C and 1095-C and employee Form 1040 filings.
Response Time
The letter generally allows 30 days to respond. The IRS manual says if there is no response, phone contact is attempted and Letter 5040-J follows with 15 days to respond, after which the case is prepared for assessment.
If You Agree or Disagree
If the employer agrees, Letter 227-J is issued and the payment is assessed. If it partly or fully disagrees, an examiner reviews its response and may recalculate, and unagreed cases can go to the IRS Independent Office of Appeals.
Three steps for the employer.
Calendar the Response Date
Put the 30 day date on a shared calendar the day the letter arrives.
Check the Employees and Months Listed
Compare the employees and months the IRS lists against your own offer and affordability records.
Prepare Your Support
Gather payroll, coverage offer and plan records for each month in question before you respond.
Three questions to settle first.
Which Months and Employees Are Named?
Ask for the IRS listing and compare it with your records.
Were Our Forms Accurate?
Ask your provider whether the codes on the filed forms match what was offered.
Who Is Responding for Us?
Ask who owns the response and whether you want a professional to handle it.
Send us your renewal.
We’ll tell you whether it looks competitive, where we see opportunity, and the five questions we’d put to your carrier. No cost, and no obligation to move anything.
The renewal letter
Your current plan summary
Contribution split by tier
Enrolled counts by tier
Four documents — two more if your group is 50 or more. Nothing else; every extra one is a reason to postpone.
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