You may have heard that the majority of the provisions in the Affordable Care Act don’t apply to employers who have 50 or fewer employees—and that’s correct. 95% of employers are not subject to the employer shared responsibility provision. However, there are a few things you need to know about the ACA if you fall into this category.

The IRS recently released 3 tax considerations for employers with fewer than 50 “full-time” employees:

1. If you have close to 50 employees and your workforce fluctuates throughout the year, you’ll need to be particularly careful that you’re following the proper calculation process.

  • If an employee is expected to work 30 or more hours per week, he/she is classified as a full-time employee.
  • An employee is considered a seasonal employee if employed on a seasonal basis or works no more than 120 days — these employees aren’t considered full time.

2. If you have 50 or fewer employees, you are eligible to purchase health insurance coverage through the Small Business Health Options Program.

3. If you have fewer than 25 full-time equivalent employees with average annual wages of less than $50,000 you may be eligible for the small business health care tax credit. You’re eligible if you cover at least 50% of your full-time employees’ premium costs and the coverage is purchased through SHOP.

All employers, regardless of size, that provide self-insured health coverage are required to annually file information returns for individuals they cover. The first returns are due to be filed in 2016 for the year 2015.

If you have questions about ACA-related tax considerations, feel free to give us a call at (864) 836-3136 and we’ll schedule a time to talk.