FAQs

1. Select QUESTIONNAIRE Tab
2. Select Add Additional EIN button
3. Input data into the required fields
4. Select SAVE button at top of screen

The IRS requires any person or company who makes certain types of payments to report them on a 1099-MISC to the recipient and the IRS. This informational form covers a wide range of payments you receive, such as rent, royalties, prizes and awards and substitute payments in lieu of dividends. However, the more common use of the form is to report your earnings when you work as an independent contractor, such as a freelance writer.

A 1099-MISC form serves a similar purpose to an independent contractor as a W-2 does for to an employee. The form reports the total amount of payments you receive from a single person or entity during the year that you provide services to. It includes some of your personal information such as name, address and either Social Security number or employer identification number. Most importantly, it will classify each type of payment in separate boxes on the form depending on the reason for your payment. Generally, if you receive payment for contract work you do, then your annual earnings will appear as nonemployee compensation.

1. Select QUESTIONNAIRE Tab
2. Select Add Additional EIN button
3. Input data into the required fields
4. Select SAVE button at top of screen

1. Select QUESTIONNAIRE Tab.
2. Make correction.
3. Select SAVE button at top of screen.

1. Select HEALTH PLAN Tab
2. Select the EIN from drop-down box whose health plan changed.
3. Select NEW
4. Enter a Health Plan Code. This can be any alphanumeric code that will be used to link this health plan to a group of employees.
5. Select Plan Type from the drop-down list and select the type of plan. The options are Self-Insured, Fully-Insured or a hybrid that contains both features. If you are not sure what option to select, please talk to your benefits department or account representative for clarification.
6. Enter Description (i.e. text to describe the plan). Ex: Full-Time Corporate Staff – Chicago.
7. Select from drop-down box YES or NO “Has this insurance plan met the affordability standards?” Check with your broker.
(If the health plan is a calendar year plan, you can check the box above the grid and information entered will apply to all months. If your plan parameters change during the year, leave this box unchecked and the Jan–Dec rows will be enabled for entry.)

1. Select HEALTH PLAN Tab.
2. Select the EIN you need to change from the drop-down box. If you have only one EIN, it will be the only one listed.
3. Select the Employee Health Plan Code you need to change. If there is only one Health Plan Code, it will be the only one listed.
4. Make change in table.
5. Select SAVE button at top of screen.

1. Select MEASUREMENT PERIOD Tab
2. Select the EIN from drop-down box.
3. Select NEW
4. Enter a code to identify group of employees being measured.
5. Enter a description for the measurement code.
6. Select measurement method: FT - FULL TIME or LOOK BACK (FOR Variable Hour Employees)
7. Fill in fields based on the measurement method selected.
8. Select SAVE button at top of screen.

If your company has Variable Hour employees that are being measured, you can create a report that gives you each employee's average hours worked monthly based on the measurement period. An employee is eligible for insurance when they average at least 130 hours per month.
1. Select REPORTS tab
2. Select EMPLOYEE MEASUREMENT SUMMARY
NOTE - This report is only as current as the monthly data that has been uploaded.

If you have Variable Hour employees that are being measured, you can create a report that will include only employees that are averaging over 120 hours per month. You can select how many months left to measure, from 0-3, before they are required an offer of insurance.
NOTE - This report is only as current as the monthly data that has been uploaded.

1. Select the TEMPLATES Tab.
2. Select the template you need and it will download to computer.
3. Select the file at bottom of screen to open template.

1. Select the TEMPLATE Tab.
2. Select the desired template type from the drop-down menu.
3. If using Chrome - Open template from the file at bottom of screen. If using IE – Select Save As and save template to your computer.
4. Open file with template, right click on the name of the template at bottom of spreadsheet.
5. Select Move or Copy option from menu.
6. Select (new book) from the “Move selected sheets to book” drop-down box.
7. Check “Create a copy” box
8. Save book to your computer with a new file name.

YES. Please make sure the employee is listed on both the Annual Template AND Covered Individual Template or you will receive an error when uploading the Covered Individual Template. The Employee needs to have their SSN listed in both the Employee SSN field and the CI SSN field on the Covered Individual Template. Please list the employee in the CI file even if he/she has no dependents enrolled in benefits.

YES. Please make sure that you upload the Annual File FIRST. If you attempt to upload the CI file first, it will error. You may enter the CI file any time after the Annual File has been loaded.

These instructions are ONLY for those enrolled in COBRA as of January 1. Midyear COBRA enrollees are not reported until the following tax year.
∙ Include all information from EMPLOYER_EIN through EMPLOYEE_ZIP
∙ Input COVERAGE_ENROLLMENT_DATE (Required)
∙ Input COVERAGE_TERMINATION_DATE (This is optional and only used for your reference)
∙ Insert "CP" under SPECIAL_STATUS

These instructions are ONLY for those enrolled in Retiree healthcare coverage as of January 1. Midyear enrollees are not reported until the following tax year.
∙ Include all information from EMPLOYER_EIN through EMPLOYEE_ZIP
∙ Input COVERAGE_ENROLLMENT_DATE (Required)
∙ Insert "RT" under SPECIAL_STATUS

These instructions are ONLY for those employees who were terminated and rehired within the same tax year.
∙ Include all information from EMPLOYER_EIN through COVERAGE_TERMINATION_DATE that is applicable to initial employment period of the tax year
∙ Add an additional line of data for each rehire period in that tax year. This information includes all data from EMPLOYER_EIN to COVERAGE_TERMINATION_DATE that
describes the employment and coverage during the period
∙ Insert "RH" under SPECIAL_STATUS for each additional line of data added for employee (not the initial employment period)
∙ Example: If the employee was rehired twice within the same tax year - you would include three data lines and insert "RH" in the two lines describing the rehire periods

These instructions are ONLY for those who began the tax year with coverage, waived it midyear but then re-enrolled/were covered later in the same tax year.
∙ Include all information from EMPLOYER_EIN through COVERAGE_TERMINATION_DATE that is applicable to initial coverage period of the tax year
∙ Add an additional line of data for the re-enrollment. This information includes all data from EMPLOYER_EIN through EMPLOYEE_ZIP for the employee
∙ Include both the original EMPLOYMENT_START_DATE and original COVERAGE_OFFER_DATE from the first line of data
∙ Input the new COVERAGE_ENROLLMENT_DATE representing the re-enrollment
∙ Insert "RE" under SPECIAL_STATUS for each additional line of data added for the employee (not the initial enrollment period line of data).

These instructions are ONLY for those who have their employer-sponsored insurance coverage continue into months greater than the employee's termination date month. This is only for employer-sponsored coverage - NOT for COBRA.
∙ Include all information from EMPLOYER_EIN through COVERAGE_TERMINATION_DATE, along with EMPLOYEE_STATUS_CODE.
∙ Insert "SV" under SPECIAL_STATUS.

You should include any former employees who are covered under your company’s health plan during the year, for all months that they were covered. In other words, for the CI file, include all months of coverage REGARDLESS of their employment status (current or former – COBRA, Retiree, Severance).

NO. This field is NOT REQUIRED. If you need SPS/GZ to check affordability for health insurance coverage according to ACA regulations, we ask that you provide the wages for all full-time employees to determine affordability.

This field is required only if you have an employee that works outside the US but their wages and health insurance are provided by a company based in the US and they pay US income taxes.

Only Self-Insured companies need to include COBRA participants. COBRA participants that are on the plan as of January 1st should be included on the Annual File template. Mid-year COBRA enrollee are reported the following year.

Only Self-Insured companies need to include COBRA participants. ALL COBRA participants - whether they enrolled in COBRA during 2016 or were enrolled as of January 1st - should be included on the CI template. ALL months of coverage (as an employee or as a COBRA participant) should be checked on the CI file.

It is acceptable to use a random date such as 1/1/13 as long as the Coverage Enrollment Date does not precede the Employee Start Date.

For uploading ANNUAL EMPLOYEE FILEs, SELF INSURED COVERED INDIVIDUALS FILEs, MONTHLY EMPLOYEE FILEs, & 1095-B FILES:
1. Select ACA FILE DROP-OFF Tab.
2. Select type of file you need to upload (Annual, Self-Insured Covered Individuals, Monthly or 1095-B).
3. Drag and Drop Files or Click on the box and select file from browser.
4. You will receive confirmation “File Uploaded Successfully”.
* IF YOU ARE A SELF-INSURED COMPANY THAT NEEDS TO COMPLETE A COVERED INDIVIDUAL’S TEMPLATE (CI FILE), YOU NEED TO UPLOAD THE ANNUAL FILE FIRST.

You may receive the message, “The file did not upload. Please address the errors listed below, and re-upload the file.” You will see the Error Message with a number to the left with the Error Count.
1. Click on the Error Count number and a pop-up window will identify the row with the error.
2. Open the spreadsheet and make necessary corrections.
3. Save spreadsheet.
4. Re-upload the spreadsheet.
5. You will receive confirmation “File Uploaded Successfully”.

1. Select the MISC FILE DROP-OFF Tab.
2. Drag and Drop Files or Click on the box and select file from browser.

1. Select ACA FILE DROP-OFF Tab or MISC FILE DROP-OFF depending on where you uploaded file.
2. Select VIEW AND DOWNLOAD ACA FILES or VIEW AND DOWNLOAD FILES.
3. A list of files that have been uploaded will be displayed.

1. Select ACA FILE DROP-OFF Tab.
2. Select VIEW AND DOWNLOAD ACA FILES.
3. A list of files that have been downloaded will be displayed.
4. Click on box next to Company Name.
5. Select DELETE button at top of screen.

1. Select the VIEW EDIT FORMS Tab.
2. Click on the GO TO THE INTERACTIVE PORTAL button.
3. Select 1095 EMPLOYEE MANAGEMENT & then Select VIEW PRINT TAX FORMS
4. Enter the Name of Employee or SSN
5. Click on PRINT 1095-C in left column and the form will download.
6. Select PDF file to open and view
7. To print select print icon in top right corner.

1. Select VIEW/EDIT FORMS Tab
2. Select GO TO INTERACTIVE PORTAL
3. Select 1095 EMPLOYEE MANAGEMENT & then Select 1095-C UPDATE TAX FORM
4. Enter the name of Employee or SSN
5. Click on PRINT 1095-C in the left column and the form will download.
6. Open and make your changes.
7. Select SUBMIT at bottom right corner.

1. Log into the portal.
2. Select VIEW/EDIT FORMS Tab
3. Select 1095 EMPLOYEE MANAGEMENT & then Select 1095-C UPDATE TAX FORM
4. Form will open and make your changes.
5. Check the CORRECTED box in upper right corner.
6. Once change is made check READY FOR RESUBMISSION box at bottom of screen.
7. Select SUBMIT at bottom right corner.

Once forms have been approved for mailing, SPS/GZ will notify you when the forms have been mailed to your employees.

When your forms are ready for review, a SPS/GZ sales representative will contact you. The forms will be on the portal under the RECIPIENT STATEMENTS tab.
1. The file will be listed with a blue hyperlink which you can click on to open and review file.
2. Once you are ready to approve forms for printing/mailing, click on the red “Needs Approval” link
3. Check the Status box.
4. Type in your name in the Signature box.
5. Click the SUBMIT box

When your forms are ready for filing, a SPS/GZ sales representative will contact you asking you to approve the forms to be filed with the IRS. Here are the steps for approving the filing with the IRS:
1. Select the APPROVE FILINGS tab along the top toolbar.
2. Check the Status box.
3. Type in your name in the Signature box.
4. Check the appropriate box for the form(s) you are ready to file.
5. Click on SUBMIT box.

Depending on how many different companies or people you receive payments from during the year, you may receive more than one 1099-MISC. Each payer must complete the form if during any year it pays you $600 or more. However, if you earn $500 from 20 different companies, you still must report your income even though you might not receive a single 1099-MISC. In most cases, the payer must provide you with a copy of the form by January 31 of each year, as well as a copy to the IRS by the last day in February.

As an independent contractor or freelancer, you report all earnings on your income tax return just like an employee does, but you do it in a different way. If your freelance work is sporadic and generally not your main source of income, then you can just include the payments in “other income” on the first page of your tax return.

If you work as an independent contractor for substantial periods during the year, then the IRS will treat you as self-employed. Self-employed taxpayers must report 1099-MISC income on a Schedule C attachment to their tax return.

In addition, you are also liable for Social Security and Medicare taxes, which you calculate on Schedule SE and attach to your return.

There are some tax advantages to earning nonemployee income on a 1099-MISC. One benefit is that you have more freedom than an employee to claim deductions that relate to your profession.

For example, if it’s necessary to use a computer to complete your work, your eligibility to claim a deduction for it is less restrictive than other taxpayers who must be eligible to itemize their deductions to do so. Furthermore, since you are not subject to withholding, you must make estimated tax payments throughout the year. But since you can calculate precisely what you owe, you can insure that you don’t pay too much in federal income tax during the year. You can use TurboTax to do the calculations for you, or get a copy of the worksheet accompanying Form 1040-ES and work your way through it.

Payers use Form 1099 – MISC, Miscellaneous Income, to:

• Report payments made in the course of a trade or business to a person who's not an employee or to an unincorporated business.
• Report payments of $10 or more in gross royalties or $600 or more in rents or compensation. Report payment information to the IRS and the person or business that received the payment.

The basic rule is that you must file a 1099-MISC whenever you pay an unincorporated independent contractor — that is, an independent contractor who is a sole proprietor or member of a partnership or LLC — $600 or more in a year for work done in the course of your trade or business.

Send Copy B of the 1099-MISC form to the recipient by January 31st . File Copy A of form 1099-MISC with the IRS by January 31st .

Form 1099-INT is an annual tax statement provided by payers of interest income, such as banks and savings institutions, that summarizes your interest income for the tax year. Interest reported on Form 1099-INT includes interest paid on savings accounts, interest-bearing checking accounts, and US Savings bonds.

This is based on IRS Regulations. If you were qualified to receive Form 1099-INT via the US Postal Service then you will be qualified to receive Form 1099-INT online. Qualifications include documented US Persons with interest income of at least $10.00.

Send Copy B of the 1099 INT form to the recipient by January 31st. File Copy A of form 1099-INT with the IRS by February 28th. If you are required to file 1099 INT forms electronically, the due date is March 31st.

• Box 1 of the 1099-INT reports all taxable interest you receive, such as your earnings from a savings account.
• Box 2 reports interest penalties you’re charged for withdrawing money from an account before the maturity date.
• Box 3 reports interest earned on U.S. savings bonds or Treasury notes, bills or bonds. However, some of this may be tax-exempt.
• Box 4 reports any federal tax withheld on your interest income by the payer.
• Box 8 relates to interest-bearing investments you hold with state and local governments, such as municipal bonds.

Form 1099-B is a form issued by a broker or barter exchanged that summarises the proceeds of all stock transactions. The sale of stock is accompanied by a gain or loss, which must be reported to the IRS when you file your taxes.

The 1099-B helps you deal with capital gains taxes. Usually, when you sell something for more than it cost you to acquire it, the profit is a capital gain, and it may be taxable. On the other hand, if you sell something for less than you paid for it, then you may have a capital loss, which you might be able to use to reduce your taxable capital gains or other income.

You pay capital gains taxes with your income tax return, using Schedule D, and the data from Form 1099-B helps you fill out Schedule D.

Box 2 of the 1099-B form tells whether the gain or loss involved is short-term or long-term. If you owned an asset, such as stock, for a year or less before selling it, any gain or loss from a sale is short-term.

If you owned it for more than a year, you have a long-term gain. The distinction is extremely important, since tax rates on long-term gains are generally significantly lower than those on short-term gains.

Cancellation of Debt
File form for each debtor whom you cancelled $600 or more of a debt owed to you if: - you are an applicable financial entity and,
- an identifiable event has occurred.

File this form for shareholders of a corporation if control of the corporation was acquired or it underwent a substantial change in capital structure. This form is furnished to shareholders who receive cash, stock or other property from an acquisition of control or a substantial change in capital structure.

Cooperatives file this form for each person:

• To whom are they paid at least $10 in patronage dividends and other distributions described in section 6044 (b) or:
• From whom they withheld any federal income tax under the backup withholding rules regardless of the amount of the payment.

This form is used by banks and other financial institutions to report dividends and other distributions to tax payers and to the IRS.

Acquisition or Abandonment of Secured Property
File this form for each borrower if you lend money in connection with your trade or business and, in full or partial satisfaction of the debt, you acquire an interest in property that is security for the debt, or you have reason to know that the property has been abandoned. You need not be in the business of lending money to be subject to this reporting requirement.

Federal, state, or local governments file this form if they made payments of:

• Unemployment compensation;
• State or local income tax refunds, credits or offsets;
• Reemployment trade adjustment assurance (RTAA) payments;
• Taxable grants; or
• Agricultural payments

They also file this if they received payments on a Commodity Credit Corporation (CCC) loan.

File this form to report distributions made from a:

• Health savings account (HSA);
• Archer Medical Savings Account (Archer MSA); or
• Medical Advantage Medical Savings Account (MA MSA)

The distribution may have been paid directly to a medical service provider or the account holder. A separate return must be filed for each plan type.

1.) Count the number of employees that are full-time (work over 130 per month).
2.) Calculate the number of FTE’s, full-time equivalent, employees.

• For each month, add the total full-time employees in step 1 to the total FTEs in step 2. Repeat this process for all 12 months (or six months, if you are using the six-month measurement period).Add all the monthly totals and divide by 12 (or six if using the six-month period) to determine the average number of full-time employees for the year. The resulting number is rounded down, if that number is not a whole number. If the result is 50 or more, you are an applicable large employer and are subject to employer shared responsibility rules for the following calendar year. Failure to provide this information are subject to a penalty, also known as the Employer Mandate.
• https://www.healthcare.gov/shop-calculators-fte/

If an employer does not offer Full-time or FTE’s employees an offer of affordable health insurance that meets the ACA requirements of Minimum Essential Coverage (Minimum Essential Coverage - IRS.gov) and Minimum Value (Minimum Value and Affordability - IRS.gov) they are subject to the “Employer Shared Responsibility Payment” a.k.a. the Employer Mandate penalty.

• For employers who don’t provide coverage, the fee is $2,000 per full-time employee (minus first 30 full-time employees).
• For employers who do provide coverage but don’t provide coverage meeting minimum-value and affordability requirements, the fee is the lesser of $3,000 per full-time employee receiving subsidies, or $2,000 per full-time employee (minus the first 30).

Coverage must be offered to Employee and dependents up to age 26. Once a dependent turns 26 they no longer need to be offered coverage. Spouses do not count as dependents and do not need to be offered coverage.

If an employee receives a tax credit from the IRS for purchasing individual coverage on the Marketplace because the employer’s coverage offered was not affordable, or did not provide minimum value, the employer could be subject to a penalty.

• -A job-based health plan covering only the employee that costs 9.69% or less of the employee’s household income.
• -8.13% of household income, for self-only coverage, is Affordable in the Health Insurance Marketplace.

A plan provides “minimum value” if it pays at least 60% of the cost of covered services (considering deductibles, copays and coinsurance).

For the purpose of ACA reporting companies that have multiple divisions with a common owner are generally combined and treated as one company. For example, company A, has 30 full-time employees and they have another division, company B, with 40 employees. If the combined number of full-time employees and full-time equivalent employees for the group is large enough to meet the definition of an ALE, then each employer in the group (called an ALE member) is part of an ALE and is subject to the employer shared responsibility provisions, even if separately the employer would not be an ALE.

1. Was an offer made to a full-time employee and his/her spouse and dependents; line 14.
2. Was the offer affordable; line 15.
3. Did the employee enroll in the coverage that was offered; line 16.
For more detailed information on the 1095-C form, IRS WEBSITE LINK.

Form 1095-C is entitled, “Employer-Provided Health Insurance Offer and Coverage.” This form is used to report what medical coverage was offered to you and your family during the calendar year. The form is comprised of four sections as follows:

Part I - Lines 1-6 report personal information about you. Lines 7-13 report information about your employer.

Part II – This section provides important information the health plan offer and coverage. The three important lines of Part II are summarized below:

Line 14 The codes listed below for line 14 describe the coverage that your employer offered to you and your spouse and other dependent(s), if any. This information relates to eligibility for coverage subsidized by the premium tax credit for you, your spouse, and your other dependent(s). For more information about the premium tax credit, see Pub. 974. You may find it online here: https://www.irs.gov/publications/p974/.

Line 15 This line reports your share of the lowest-cost monthly premium for individual minimum essential coverage providing minimum value that your employer offered you. The amount reported on line 15 may not be the amount you paid for coverage if, for example, you chose to enroll in more expensive coverage such as family coverage. Line 15 will show an amount only if code 1B, 1C, 1D, or 1E is entered on line 14. If you were offered coverage, but not required to contribute any amount towards the premium, this line will report a “0.00” for the amount.

Line 16 The codes listed below for line 16 report for one or more months of the calendar year that one of the following situations applied to you: you were not employed or were not a full-time employee; you enrolled in the minimum essential coverage offered; you were in a waiting period (after your hire date) or in a measurement period (which applies only to hourly employees whose hours vary month to month); your employer contributes to a multi-employer health plan; you waived coverage of affordable health insurance offered by your employer; or your employer’s health plan year begins on a date other than January 1st and if certain criteria are met, is eligible to comply with the ACA as of the plan year renewal date.

Part III- This section will only be completed if your employer's,’ health plan is “self-insured” If your employer offers coverage provided by a health insurance company, your employer is not required to complete this section. In this case, you will receive Form 1095-B from the insurance company showing what months during calendar year 2015 you and your family were covered.

For employers with self-insured health coverage , Part III reports each member of your family that is covered by your employer’s health plan during calendar year 2015 (including you). A date of birth will be entered in column (c) only if a Social Security Number is not entered in Column (b). Column (d) will be checked if the individual was covered for at least one day in every month of the year.

The 1094-C Form is the “Transmittal of Employer Provided Health Insurance Offer and Coverage Information Returns” form and acts as a cover sheet for the 1095-C Forms; the employer sends the completed form to the IRS.

The 1095-B Form is a tax form that is used to verify that you, and any covered dependents, have health insurance that qualifies as minimum essential coverage. This form shows the type of health coverage you have, any dependents covered by your insurance policy, and the dates of coverage for the tax year.

Form 1094-B is the “Transmittal of Health Coverage Information Returns” form that is completed by the insurance provider (or self-insured employer) and acts as a cover sheet to the 1095-B forms.

• Forms 1095-C and 1095-B are due to individuals by January 31st.

• Forms 1095-C, 1094-C, 1095-B, 1094-B are required to be filed with the IRS by March 31st if filing electronically.
• February 28th if filing on paper. Once these are complete hopefully if there are more small edits to the content we can do it on the live site.

No. These forms are for employee records. This form is used to report what medical coverage was offered to you and your family for the previous year.

As a coverage provider, self insured companies need to file forms 1094-B and 1095-B or forms 1094-C and 1095-C, depending on whether the employer is an applicable large employer with the IRS. Self insured companies need to provide information for both the employees and the dependants that are listed on the employee’s plan; their SSN or DOB, and the months they had coverage for the reporting year.

An ALE may be eligible to use the 98% offer method if they offer affordable insurance providing minimum value to 98% of their employees and their dependents.

If the break in service was less than 13 weeks the employee should be treated as an ongoing employee when they return to work. They should be eligible to enroll in health plan the first of the month following their start date.

If the break in service was more than 13 weeks the employee should be treated as a new hire and you can wait until the end of the established waiting period before offering coverage.

For Educational organizations the break in service can be up to 26 weeks instead of 13 and employee would still be considered an ongoing employee.

An offer of COBRA continuation coverage that is made to a former employee due to termination of employment is not reported as an offer of coverage in Part II of Form 1095-C. If the ALE Member is otherwise required to complete a Form 1095-C for the former employee (because, for example, the individual was a full-time employee for one or more months of the year before terminating employment), the ALE Member should use code 1H, No offer of coverage, on line 14 for any month that the former employee was offered COBRA continuation coverage. For those same months, the ALE Member should use code 2A, Employee not employed during the month, on line 16 for each month in which the individual is not an employee (regardless of whether the former employee enrolled in the COBRA continuation coverage). Note, however, that an ALE Member that provides COBRA continuation coverage through a self-insured health plan generally must report that coverage for any former employee or family member who enrolls in that COBRA continuation coverage in Part III of the Form 1095-C. Also, the ALE Member may report the coverage on a Form 1095-B for any individual who was not an employee during the year and who separately elected the COBRA continuation coverage.

An offer of COBRA continuation coverage that is made to an active employee due to a reduction in hours is reported differently than an offer of COBRA continuation coverage to a former employee. See the next question for more details.

An ALE Member making an offer of COBRA continuation coverage to an active employee who loses eligibility for non-COBRA coverage due to a reduction in hours (for instance, a change from full-time to part-time status resulting in loss of eligibility under the plan) should report the offer of COBRA continuation coverage as an offer of coverage in Part II of Form 1095-C. In this instance, the code entered on line 14 for the months in which an offer of COBRA continuation coverage is made should reflect only the individuals who received an offer of COBRA continuation coverage (which generally will be only the individuals enrolled in the non-COBRA coverage at the time of the reduction in hours) or the individuals who received an offer of other coverage at the same time the COBRA continuation coverage is offered. This is because only the individuals who received an offer of COBRA continuation coverage (or of other coverage at the same time) are potentially ineligible for the premium tax credit for coverage through the Marketplace due to the offer of COBRA continuation coverage (or other coverage).

If you can afford to buy insurance and do not purchase a health insurance policy you could be fined. All individuals in the U.S. are required to have Minimum Essential Coverage.

ALE’s that fail to furnish, or miss the mailing deadline, to their employees with the 1095-C form and do not file these forms with the IRS are subject to a $250 penalty per form up to a maximum of 3 million dollars. On top of this penalty the IRS could enforce an additional $250 penalty per form for not filing, or filing late, with the IRS. This are similar penalties the IRS imposes for not providing W2/W3 forms.

The IRS recommends that you contact the terminated employee and inform them of the error on their form. Keep documentation of this request. You however would not be subject to a penalty if you do not receive a response from the former employee and the error could not be corrected.

1.) SPS/GZ has certified professionals (including CPA’s) managing the filings and providing support.
2.) We can help you determine if you are an ALE, Applicable Large Employer and therefore subject to the Employer Mandate.
3.) Determine if the health plans offered to employees meet the ACA standards for affordability, minimum essential coverage and minimum value to avoid the possibility of IRS penalties
4.) Track hours of variable hour employees and alert you when an offer of coverage should be made to an employee.
5.) Assign an account manager to answer questions and guide you through the steps of compiling the data necessary for completion of 1095-C, and 1094-C forms. For health insurance providers 1095-B and 1094-B forms.
6.) User friendly portal allows clients to review, correct and print forms as needed
7.) Archive of data for seven years

SPS/GZ’s commitment to accuracy and high level of support will help ease the burden of ACA reporting from employers. SPS/GZ offers a personal approach to our clients’ needs and we are always available to assist with questions to make the reporting process easier for our clients. SPS/GZ offers the ability for the client to make corrections on their own, and print corrected forms to be mailed to employees. The corrected forms will be resubmitted with the IRS on a regular basis and updates will be provided by account manager. Current clients rate SPS/GZ highly for quality service and knowledgeable support.

1. Employer fills out online questionnaire about company and provide information on company’s health plans offered to employees.

2. Annual template for full-time workers and monthly template if company has variable hour workers would be downloaded from portal and completed and then uploaded to our secure portal.
Employee information; SSN, Address, etc.

Start date
Date offer of coverage was made. This should be the date the employee is eligible to enroll in health plan.
Enrollment Date
Type of health coverage plan offered
Status (Full-time, Part-time, Variable-Hour)
Termination date

3. Assigned SPS/GZ support manager will review data to ensure completeness and reasonableness of data received
4. SPS/GZ’s proprietary software creates ACA codes for each employee and generates forms 1095-B, 1094-B, 1094-C and 1095-C
5. SPS/GZ will ensure forms are mailed to employees and filed with IRS by deadlines.

SPS/GZ needs you to provide either monthly or annual data uploads. This will be based on your company’s needs and the structure of your workforce. These are the two options for data collection and processing:

• Monthly Employee Format (MEF) – for companies with a workforce that includes variable-hour employees
• Annual Employee Format (AEF) – for companies who only employ full-time employees.
  It is important to include all employees on your company’s monthly or annual template (even part-time employees who are not offered benefits). This is because all employees are required to be included in the total employee count on Form 1094-C.

SPS/GZ will also need information on your company’s health plans. This information is usually provided by your HR department or benefits manager.

Health Plan

• Start date
• Termination date
• Status (Full-time, Part-time, Variable-Hour)
• Type of health coverage plan offered
• The lowest cost of employee’s share of the monthly premium for self only coverage
• Date offer of coverage was made. This should be the date the employee is eligible to enroll in health plan.

Yes, if you would like to export your payroll and benefits employee information SPS/GZ will format data into the required templates that are needed to complete the 1095-C and 1095-B forms as long as they have the data points required for reporting.

SPS/GZ has a highly secure and encrypted (SSL technology) client portal for data exchanges.

Section 6039 of the Internal Revenue Code (IRC) of 1986 imposes reporting requirements on companies with respect to exercises of Incentive Stock Options (“ISOs”) and transfers of stock acquired through an Employee Stock Purchase Plan Under Section 423(c) of the Internal Revenue Code. In November 2009, the IRS finalized the regulations under Section 6039. The final regulations require companies to file an information return with the IRS and to provide stock plan participants with a copy of the form’s content by January 31st of each year (for the transactions that occurred in the previous calendar year).

Form 3921 is entitled, “Exercise of an Incentive Stock Option Under Section 422(b).” This form is used to report the ISO exercises that an employee executed during the previous calendar year. All pertinent information for calculating taxable income is included on this form. There are six boxes, as summarized below:

Box 1: Grant Date: This is the date that the ISO was granted.
Box 2: Exercise Date: This is the date that a person exercised the ISO (purchased shares of stock pursuant to this option).
Box 3: Exercise Price: This is the price paid for each share of stock purchased through this ISO exercise.
Box 4: Value on Exercise Date: This is the fair market value of the respective company’s stock on the date of exercise, as determined by the company’s stock plan documents.
Box 5: Number of Shares: This is the number of shares exercised (purchased) on the exercise date. This number may or may not equal the number of shares sold, if any, on that date.
Box 6: IF APPLICABLE (only if the recipient is employed by a subsidiary of the company). This box captures the name, address and tax identification number of the parent company, the stock of which was purchased in this ISO exercise. If the recipient is employed by the issuer (parent) company, then this box is left blank.

The OMB Number (Office of Management and Budget) is a control number assigned by the IRS. This number does not factor into personal tax calculations.

The Transaction ID Number is a unique transaction number that the IRS uses to track activity, especially in the event that any corrected forms must be filed. A unique number is assigned to each transaction for this purpose, and it does not factor into personal tax calculations.

Employees should use the information on Form 3921 to assist with calculating income tax obligations for the respective tax year. Employees may wish to provide any tax preparers with a copy of Form 3921. Recipients do NOT need to include a copy of Form 3921 with their tax returns.

Tax treatment for ISOs is governed by IRC Section 422(b). The treatment varies based on how long an individual holds the shares before he/she sells them. Employees are NOT taxed at the time that they exercise ISO shares UNLESS they sell them at the same time. In other words, an ISO exercise alone does not trigger a taxable event; individuals are taxed when they SELL the shares (whether as part of a cashless exercise or otherwise). Thus, if individuals didn’t sell the shares that are reported on their Form 3921 in the respective tax year, then, generally, no taxable income is yet reportable.

Individuals must, however, consider the Alternative Minimum Tax (AMT) adjustment that is triggered if they hold the shares of stock acquired by the exercise of an ISO at the end of the calendar year in which they exercised the ISOs. (If individuals exercise the ISO and sell the ISO shares in the same year, then the AMT adjustment is not triggered.) Due to the complexity of the AMT calculations and rules, SPS/GZ advises that people consult with their tax advisors if they exercised ISOs in the respective calendar year and have not yet sold the ISO shares by the end of that calendar year.

There are essentially two types of dispositions (sales): a “Qualified Disposition” (QD) and a “Disqualified Disposition” (DD). As one might have guessed, a QD is given more favorable tax treatment by the IRS. In order to receive QD tax treatment, an individual must hold the stock acquired by the exercise of his/her ISO beyond the later of (i) one year after the date of exercise AND (ii) two years after the date that the ISO was granted. If individuals do not meet both of these minimum holding requirements, then they will receive DD tax treatment.

No. It is important to note that employers are NOT required to withhold income taxes for the exercise or sale of ISO shares. However, the company is required to record and report to the IRS ordinary income upon the sale of ISO shares if the sale is a DD, and this income is reported on Form W-2. It is important to retain the Form 3921 received from the company for tax preparation purposes.

Form 3922 is entitled “Transfer of Stock Acquired Through an Employee Stock Purchase Plan Under Section 423(c).” This form captures all of the ESPP purchases that an employee executed during the respective calendar year. All pertinent information for calculating taxable income is included on this form. There are eight boxes, as summarized below:
Box 1: Grant Date: This is the first day of the offering period, also referred to as the Subscription Date or Enrollment Date.
Box 2: Exercise (Purchase) Date: This is the date that the shares were purchased under the ESPP.
Box 3: Grant (Subscription) Value: This is the fair market value of the company’s stock on the first day of the offering period as determined under the stock plan documents
Box 4: Exercise (Purchase) Value: This is the fair market value of the company’s stock on the Exercise (Purchase) Date.
Box 5: Exercise (Purchase) Price: This is the actual price at which an employee purchased the shares on the Exercise (Purchase) Date.
Box 6: Number of Shares: This is the number of shares purchased on the ESPP purchase date.
Box 7: Date of Transfer: This is the date that the purchased shares were first transferred (for example, to the broker). For purposes of this form, the purchase date will usually coincide with the date of transfer.
Box 8: Discounted Price on Subscription Date: This represents the price that an employee would have paid for the shares in the offering had the discounted price been set on the grant (subscription) date. In other words, an employee would apply the purchase plan percentage discount to the fair market value of the stock on the grant date. This information is helpful in calculating the “ordinary income” portion of the gain for a “Qualified Disposition” – as explained in Section III below.

Employees should use the information on Form 3922 to assist with calculating the income tax obligations for the respective tax year. Employees may wish to provide any tax preparers with a copy of Form 3922. Recipients do NOT need to include a copy of Form 3922 with their tax returns.

Tax treatment for ESPP transactions varies based on how long an individual held the shares before selling them. Individuals are NOT taxed at the time that they purchase the shares under the ESPP (which the IRS refers to as exercising an option to purchase the shares) UNLESS they sell them at the same time. Thus, if an individual didn’t sell the shares that are reported on Form 3922 in the respective calendar year, then he/she has no taxable income in that year from the ESPP purchase.

There are essentially two types of dispositions (sales): a “Qualified Disposition” (QD) and a “Disqualified Disposition” (DD). As one might have guessed, a QD is given more favorable tax treatment by the IRS. In order to receive QD tax treatment, an individual must hold the stock acquired by the purchase of ESPP shares beyond the later of (i) one year after the purchase of the shares AND (ii) two years after the date that the ESPP “option” was granted to (i.e. the beginning of the ESPP offering period). If individuals do not meet these minimum holding requirements, then they will receive DD tax treatment.

For a DD, the company is required to record and report to the IRS the ordinary income component on the employee’s Form W-2. However, failure of employees to return disposition surveys in a timely manner can impact the ordinary income being properly reflected on the Form W-2. Please note that employees must still compute their capital gain or loss component on the sale of the ESPP shares and report this amount on their tax returns shares.

The deadline for distributing the statements to participants with regard to both ISOs and ESPPs is January 31st. The deadlines to file Forms 3921 and 3922 with the IRS are February 28 for paper filers and March 31 for electronic filers.

You are required to file Forms 3921 and 3922 electronically if you have 250 or more returns to file with the IRS.

Penalties are assessed per each required form, and range from $30 to up to $100 per form for failure to file or for an incorrect filing, and $50 for failure to furnish the employee a correct information statement, subject in each case to certain annual maximum caps. The penalties are higher for noncompliance due to intentional disregard of the requirements and in such circumstances, there is no cap on maximum aggregate penalties.