The Affordable Care Act contains several tax provisions that affect employers. Under the ACA, the size and structure of a workforce – small, or large – helps determine which parts of the law apply to which employers.

The number of employees an employer had during the prior year determines whether it is an applicable large employer for the current year. This is important because two provisions of the Affordable Care Act apply only to applicable large employers. These are the employer shared responsibility provision and the employer information reporting provisions for offers of minimum essential coverage.

An employer's size is determined by the number of its employees.

  • An employer with 50 or more full–time employees or full–time equivalents is considered an applicable large employer – also known as an ALE – under the ACA.
  • For purposes of the employer shared responsibility provision, the number of employees a business had during the prior year determines whether it is an ALE the current year. Employers make this calculation by averaging the number of employees they had throughout the year, which takes into account workforce fluctuations many employers experience.
  • Employers with fewer than 50 full–time or full–time equivalent employees are not applicable large employers.
  • Calculating the number of employees is especially important for employers that have close to 50 employees or whose work force fluctuates during the year.

To determine its workforce size for a year, an employer adds the total number of full–time employees for each month of the prior calendar year to the total number of full–time equivalent employees for each calendar month of the prior calendar year. The employer then divides that combined total by 12.

For more information, visit our Determining if an Employer is an Applicable Large Employer page on IRS.gov/aca.

Learn more about Affordable Care Act tax law changes for small businesses at www.HealthcareACT.com, powered by TaxAct.

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Upcoming Tax Dates

March 1 — Farmers & fishermen
File your 2018 income tax return (Form 1040) and pay any tax due Details

March 10 — Employees who work for tips
If you received $20 or more in tips during February, report them to your employer Details

March 15 — S Corporations
File a 2018 calendar year income tax return (Form 1120S) and pay any tax due Details

March 15 — S Corporation election
File Form 2553, Election by a Small Business Corporation, to elect to be treated as an S corporation beginning with calendar year 2018. If Form 2553 is filed late, S corporation treatment will begin with calendar year 2019.

March 15 — Partnerships
File a 2018 calendar year return (Form 1065) Details

March 15 — Electing larger partnerships
Provide each partner with a copy of Schedule K1 (Form 1065B), Partner's Share of Income (Loss) From an Electing Large Partnership, or a substitute Schedule K1. This due date applies even if the partnership requests an extension of time to file the Form 1065B by filing Form 7004

March 15 — Partnerships
Electing large partnerships: File a 2018 calendar year return (Form 1065-B) Details

March 15 — Social security, Medicare, and withheld income tax
If the monthly deposit rule Page 6 Publication 509 applies, deposit the tax for payments in February.

March 31 — Electronic filing of Forms W2
File copies of all the Forms W2 you issued for 2018. This due date applies only if you electronically file.

March 31 — Electronic filing of Forms W2G
File copies of all the Forms W2G you issued for 2018. This due date applies only if you electronically file.

March 31 — Electronic filing of Forms 8027
File Forms 8027 for 2018. This due date applies only if you electronically file.

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