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

February 10 — Social security, Medicare, and withheld income tax
File Form 941 for the fourth quarter of 2017. This due date applies only if you deposited the tax for the quarter timely, properly, and in full.

February 10 — Certain small employers
File Form 944 to report social security and Medicare taxes and withheld income tax for 2017. This due date applies only if you deposited the tax for the year timely, properly, and in full.

February 10 — Farm employers
File Form 943 to report social security and Medicare taxes and withheld income tax for 2017. This due date applies only if you deposited the tax for the year timely, properly, and in full.

February 10 — Federal unemployment tax
File Form 940 for 2017. This due date applies only if you deposited the tax for the year timely, properly, and in full.

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

February 15 — All businesses
Give annual information statements to recipients of certain payments you made during 2017 Details

February 15 — Social security, Medicare, and withheld income tax
If the monthly deposit rule applies, deposit the tax for payments in January.

February 15 — All employers
Begin withholding income tax from the pay of any employee who claimed exemption from withholding in 2017, but did not give you Form W4 to continue the exemption this year.

February 15 — Individuals
If you claimed exemption from income tax withholding last year on the Form W-4, you must file a new Form W-04 by this date to continue your exemption for another year Details

February 19 — Everyone
Federal Holiday (Washington's Birthday) Details

February 28 — All businesses
File information returns (for example, Forms 1099) for certain payments you made during 2017.

February 28 — Payers of gambling winnings.
File Form 1096 along with Copy A of all the Forms W2G you issued for 2017. If you file Forms W2G electronically, your due date for filing them with the IRS will be extended to 03-31. The due date for giving the recipient these forms remains 01-31.

February 28 — All employers
File Form W3, Transmittal of Wage and Tax Statements, along with Copy A of all the Forms W2 you issued for 2017. If you file Forms W2 electronically, your due date for filing them with the SSA will be extended to 03-31. The due date for giving the recipient these forms remains 01-31.

February 28 — Large food and beverage establishment employers
File Form 8027, Employer's Annual Information Return of Tip Income and Allocated Tips. Use Form 8027T, Transmittal of Employer's Annual Information Return of Tip Income and Allocated Tips, to summarize and transmit Forms 8027 if you have more than one establishment. If you file Forms 8027 electronically, your due date for filing them with the IRS will be extended to 03-31.

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