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

The number of employees you had during the prior year determines whether your organization 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. The vast majority of employers fall below the workforce size threshold on which ALE status is based and therefore are not subject to these provisions.

Your organization's size is determined by the number of your 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 your workforce size for a year, you add 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. You then divide that combined total by 12.

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

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Upcoming Tax Dates

May 2 — Social security, Medicare, and withheld income tax
File Form 941 for the first quarter of 2017. Deposit or pay any undeposited tax under the accuracy of deposit rules. If your tax liability is less than $2,500, you can pay it in full with a timely filed return. If you deposited the tax for the quarter timely, properly, and in full, you have until May 10 to file the return.

May 2 — Federal unemployment tax.
Deposit the tax owed through March if more than $500.

May 2 — Form 720 taxes
File Form 720 for the first quarter of 2017.

May 2 — Wagering tax
File Form 730 and pay the tax on wagers accepted during March.

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

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

May 11 — Communications and air transportation taxes under the alternative method
Deposit the tax included in amounts billed or tickets sold during the first 15 days of April.

May 13 — Regular method taxes
Deposit the tax for the last 15 days of April.

May 16 — Social security, Medicare, and withheld income tax
If the monthly deposit rule applies, deposit the tax for payments in April.

May 16 — Nonpayroll withholding
If the monthly deposit rule applies, deposit the tax for payments in April.

May 25 — Communications and air transportation taxes under the alternative method
Deposit the tax included in amounts billed or tickets sold during the last 15 days of April.

May 27 — Regular method taxes
Deposit the tax for the first 15 days of May.

May 31 — Wagering tax
File Form 730 and pay the tax on wagers accepted during April.

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