The Taxpayer Advocate Service has added a new Employer Shared Responsibility Provision Estimator online tool to help a business determine its potential liability under the Affordable Care Act for the employer mandate.
Employers and their tax practitioners can use the ESRP Estimator to determine the number of their full-time employees, including full-time equivalent employees and whether it might be considered an applicable large employer, or ALE. If it is, the tool can also help employers determine the maximum amount of their potential liability for the Employer Shared Responsibility Payment that could apply if the employer fails to offer coverage to the required number of full-time employees and their dependents.
The tool will only help provide the information for tax year 2016 and forward. Due to various transition relief rules, the tool cannot be used for tax year 2015. For information about those rules and how to determine the payment for 2015, see the ESRP Regulations.
The estimator will not report a payment estimate to the IRS or interact with the employer’s tax return or tax account information, the Taxpayer Advocate Service noted, but is intended as a guide to help employers understand the ESRP. The tool provides definitions of key terms, links to the actual regulations and offers real-life examples and detailed instructions.
Earlier tools available from the Taxpayer Advocate Service include the Small Business Health Care Tax Credit Estimator, which helps determine if a company might be eligible for the Small Business Health Care Tax Credit and how much credit it might receive. This tool provides an estimate for tax year 2014 and beyond. However, some figures used in determining the credit are indexed for inflation. Because of this, for future years, the estimator cannot provide a detailed estimate.
The Premium Tax Credit Change Estimator helps estimate how an individual taxpayer’s premium tax credit will change if their income or family size changes during the year. The tool does not report changes in circumstances to the health insurance marketplace. To report changes and to adjust the amount of advance payments of the premium tax credit, taxpayers and their tax preparers need to contact their health insurance marketplace.
The Individual Shared Responsibility Payment Estimator helps individual taxpayers and tax preparers estimate the amount that individuals may have to pay if they did not have minimum essential coverage during the year. The tool can only provide an estimate of the individual shared responsibility payment. To determine the payment when filing the actual tax return, use the Shared Responsibility Payment Worksheet in the instructions for Form 8965.
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