IRS Quick Alert for Electronic ACA Filing

Today is the deadline for filing electronic ACA reports.  The following email came today from the IRS QuickAlert subscription service:

“If you are an applicable large employer, self-insured employer, or other health coverage provider, the deadline to electronically file ACA information returns with the IRS is midnight ET on June 30, 2016.  The ACA Information Returns (AIR) system will remain up and running after the deadline.  If you are not able to submit all required ACA information returns by June 30, 2016, please complete the filing of your returns after the deadline.

It is important to note the following:

• The AIR system will continue to accept information returns filed after June 30, 2016.  In addition, you can still complete required system testing after June 30, 2016.
• If any of your transmissions or submissions was rejected by the AIR system, you have 60 days from the date of rejection to submit a replacement and have the rejected submission treated as timely filed.
• If you submitted and received “Accepted with Errors” messages, you may continue to submit corrections after June 30, 2016.

The IRS is aware that some filers are still in the process of completing their 2015 tax year filings.  As is the case for other information returns, penalties may be associated with the submission of the ACA information returns for failure to timely file required returns.  As the IRS has publicly stated in various forums in recent months, filers of Forms 1094-B, 1095-B, 1094-C and 1095-C that miss the June 30, 2016, due date will not generally be assessed late filing penalties under section 6721 if the reporting entity has made legitimate efforts to register with the AIR system and to file its information returns, and it continues to make such efforts and completes the process as soon as possible.   In addition, consistent with existing information reporting rules, filers that are assessed penalties may still meet the criteria for a reasonable cause waiver from the penalties.”

HR Update for electronic filing

Version 7.61.355 has been released with additional validation features when generating the electronic ACA report file.  This version is available for download right now via the Check for Updates option on the Tools menu.

The program will now check additional required items and report problems on the exception reports that could lead to the file being rejected by the IRS.  You will likely want to correct these errors if possible before uploading your file.

Also, additional fields are checked for invalid characters and these are removed automatically.  For instance, periods in the address line will be removed (“P.O. BOX” will be changed to “PO BOX” and “ST.” to “ST”).

The biggest problem with initial files uploaded to the IRS was with missing or incomplete employee addresses.  The address, city, state, and zip are all required fields on the 1095-C form.  If any of these are missing, the employee account #, name and full address will be listed on the exception report.

In some cases it may be impossible to obtain a correct/valid address for an employee that is no longer working.  A checkbox has been added to the Generate Electronic ACA Files window to tell the program to substitute the employer address for employees that have a missing or invalid address.

We recommend all customers update to this version before generating their files for upload to the IRS.

 

ACA Electronic Filing Point of No Return!

Due to the lengthy process involved in electronically filing your 1094-C and 1095-C on the IRS website, we are quickly approaching the point in time where it will be impossible to submit your files by the June 30th deadline.

Go here for our Datatech Transmitter Code Training video.

Please note the following time estimations:

1. Employee One registers on the irs.gov e-Services website: 1 day
2. Employee Two registers on the irs.gov e-Services website: same day
3. Both Employees receive their registration completion instruction letter from the IRS in the U.S.P.S. mail: up to approximately 5 days
4. Employee One completes the ACA Application for TCC: 1 day
5. Employee Two approves the ACA Application for TCC: same day
6. TCC is provided immediately on the confirmation screen and sent in paper form via the U.S.P.S. mail, but Test files must wait to be submitted: 2 days
7. Test Files are created and Uploaded to the AIR UI Channel Login – AATS (Testing) website: 1 day
8. If errors are found allow time for corrections and resubmitting Test files: 1 to 2 days
9. Once Test files show Accepted, call the IRS Help Desk to change your account status to “P” or Production: 1 day
10. Once your account is in Production status, you must wait before submitting your actual electronic files: 2 days
11. Generate and upload your actual electronic files to the AIR UI Channel Login -Production website: 1 day
12. If errors are found, it will take time for the IRS to notify you that your actual electronic files have not been Accepted: up to 7 days.

As you can see, if your two employees have not yet started the Registration process on the e-Services website, you may have already passed the point of no return, and you may not be able to submit your electronic files in time to meet the deadline. If this is the case with your company, REGISTER TODAY. OTHERWISE, YOU WILL NOT BE ABLE TO FINISH THE PROCESS BY THE JUNE 30, 2016 DEADLINE.

AB 1513 Safe Harbor Report update

A number of changes have been made to the AB 1513 Safe Harbor Report.  You can use the Tools->Check for Updates option to download the latest version and get the following changes:

• For the “Actual” safe harbor method, the report will now calculate and total the interest due.  A total interest amount will be printed for each employee (not each check) and at the end of the report.

  Interest is calculated at 10% per year, which works out to 0.0273972% per day.  The program calculates the number of days between the check date and today’s date on each check to determine the interest amount for each check.  Because the interest amount is based on the date the report is run, and actual interest paid to employees will be based on when checks are issued, the actual interest amount will be more than what appears on this report if you choose to use this method.

• If an employee’s net break amount due is negative, the report will not include this negative amount in the report total.
• An option to print totals by grower account has been added for farm labor contractors.  When this box is checked, the report will print a section listing totals by grower at the end of the report.  If you are using the “Actual” method, the interest due for each grower will also be listed.

  Due to rounding differences, the total break amounts due by grower may not agree exactly with the report total.

• An adjustment has been made to the regular rate of pay calculation.  Hours needed to be adjusted for piecework wages that were paid without breaks.
• An adjustment has been made to hourly+incentive wages when breaks were paid separately.  Previously, the program incorrectly credited breaks paid based on both the base hourly wages and the breaks paid separately.  This has been changed so that the breaks paid are based on the break wages type paid separately.
• When using the “Actual” safe harbor method, if an employee was paid on a piecework basis but did not make minimum wage, an argument can be made that the employee is not due any additional wages for breaks.  A checkbox has been added that will credit any minimum wage adjustment line items against the break wages due.

  When calculating the actual wages due, if breaks were paid separately for these employees, the break wages would simply offset the minimum wage adjustments.  IN other words, a lower minimum wage adjustment would have been added to the check.  This results in the employee being paid the same amount as he originally was.

  When this option is enabled, an asterisk will print next to the Breaks Paid amount on any days where minimum wages adjustments are credited against breaks due.

• The report can now include line item detail imported from other payroll/accounting systems.  If you used another system, such as Famous, during the time period covered by the AB 1513 safe harbor provisions, we may be able to export data from that system and import it into our payroll system for reporting purposes.

  Contact Datatech customer support for more information.  Export/import jobs will be billed on an hourly basis.

ACA Reporting: uploading your test file

After you have obtained your TCC from the IRS, the next step is to upload a set of test files to pass their “communications test”.  This will verify that you can upload the required manifest and form files and receive the Receipt ID produced by the IRS.

Unfortunately, the IRS doesn’t seem to have gone out of their way to provide you an obvious method of getting to the test file upload page.  When you log into your e-Services account, there doesn’t seem to be any menu option or link that will take you there.

Here is the link for the AIR UI Channel Login – AATS (Testing).  Use this link to upload your test file.  Refer to the online help page for more details about generating the test file and uploading it.  (Press F1 on the Generate Electronic ACA File window to view the help page.  Review the information for the Create Test File button and the link at the bottom of the page for the ACA Electronic Test File Upload.)

After uploading your test file, call the IRS Help Desk to give them the Receipt ID so that they can check the file and change your status from “test” to “production”.

Here is the link for the AIR UI Channel Login -Production. Use this link after you’ve upload your test file and your TCC status has been changed to “Production” to upload the actual ACA electronic file.

Help with ACA Application for TCC

Many questions have been raised about how to apply for and obtain your TCC code on the IRS e-Services website. The following document, available on the IRS site, may be helpful for those finding it a challenge to choose the correct options when requesting your code(s).

Tutorial for ACA Application for TCC

Electronic ACA reporting update

The IRS has notified us that we have passed the test scenarios and that our software developer TCC status has been changed to “production”.  This change will go into effect in 48 hours, so we recommend that you submit your electronic files no earlier than June 9th.

As a reminder, you need to complete the following before you can electronically file your 1094-C/1095-C information:

1. Have two responsible individuals in your company sign up for IRS e-Services accounts.  This requires submitting information found on your tax returns to verify your identity.  The IRS will send a letter in the mail to complete the registration process.
2. One of these individuals must complete the application for the issuer or transmitter TCC and both must electronically sign it.
3. Submit a test file to complete the required communications test.  Make sure that the IRS changes your TCC status from “test” to “production”.  You cannot submit “live” data if your TCC status is “test”.
4. Fill out the 1094-C information, print the form on paper, and verify that the information is correct.  You don’t need to file on paper, but you should print a paper copy to make sure that the program is filling out the form with the correct information.

An update to the Human Resources program is now available that will generate a test file for step #3 along with a documentation update on the Generate Electronic ACA File option. You can download and install this update and review the information now.

Due to the lead time in signing up for e-Services and getting your TCC status changed to “production”, you need to start this process well before the deadline of June 30.  If you have not started this process yet, get started immediately.

What does a fishy email look like?

Email messages that trick users into installing malware still seem to be working.  Some of our customers recently have been hit with cryptolocker attacks.  Even when anti-virus/anti-malware is in use, they may not catch some of the newest malware.

There are usually several easy to spot tip-offs that an email is bogus.  Here is a sample email that I received that looks suspicious with explanations of what you can look for to avoid being tricked into installing some software that will do Really Bad Things to your computer and data:

1. Notice that the domain for the “From:” email address is “wispaninterent.com”–not paypal.com.  This is an immediate tip-off that the message is not really coming from PayPal.  (If the full email address doesn’t appear, try placing the mouse pointer over the “From:” name and see if a tooltip appears with the full email address.)
2. Official messages from big companies always pay careful attention to branding.   Notice that the company name appears three different ways:  “Paypal”, “paypal” and “PayPal”.  That is just sloppy, and an official email from PayPal would never go out with these types of mistakes.
3. You can place your mouse pointer over any link in an email and see a tooltip that shows you the link address.  But don’t click on it!  Like the “From:” email address, this link is not using a PayPal domain name.  It looks like some kind of file storage site (“filemail.com”) that is obviously not linked to PayPal.Also, the link appears to be a direct link to a file, not to a web page (it doesn’t end in file extension like “.htm”, “.html”, or “.asp” that would indicate it is a web page.)  Always be suspicious of a direct link included in an email.
4. Does the email try to create a sense that you must install something?  If so, assume it is suspicious until proven otherwise (say by visiting the paypal.com site in this example to confirm that a “software upgrade” is needed).  This is social engineering at work.Ask yourself if you ever had to install software for this product before.  If you actually have used PayPal before but only in a web browser, you should never have installed any Windows software to use PayPal before.  If that is the case, why do you need to install a software upgrade now?

   If you have installed and used the PayPal App, then the upgrade process should be handled directly by the app or by going to the app store where you got the app and downloading an update directly from there.  And if you have used the PayPal App on a phone or tablet, the upgrade would need to be handled on that device, not your Windows PC.

If you are ever not sure, the best thing to do is just don’t click on a link in an email message.  Check with your system administrator especially when you get a message that some software needs to be installed or updated.  Doing that can prevent a potential disaster.