QuickBooks ALE Guide: 1095-C and 1094-C Filing Essentials
Applicable Large Employers must file ACA forms 1095-C and 1094-C annually. Learn the thresholds, deadlines, and how QuickBooks handles ACA reporting.
If your business had 50 or more full-time equivalent employees in the previous calendar year, the IRS classifies you as an Applicable Large Employer (ALE). That status brings specific annual reporting requirements under the Affordable Care Act (ACA), and missing the filings can trigger penalties. Here is what ALEs need to file, when it is due, and how to handle it.
Determining ALE Status
The 50-employee threshold is based on full-time equivalent employees (FTEs), not just headcount. To calculate this, you combine the hours worked by part-time employees and divide by a full-time schedule. If your average across the prior year reaches 50 or more, your organization is an ALE for the current reporting period. All separate companies under common ownership are generally combined for this calculation.
The Core Forms: 1095-C and 1094-C
ALEs use two specific forms to report the health coverage offered to employees:
- Form 1095-C (Employee Statement): You must generate a copy of this form for every full-time employee, regardless of whether they enrolled in coverage. It details what coverage was offered, to whom, and for which months. A copy goes to the employee and a copy goes to the IRS.
- Form 1094-C (Transmittal Summary): This acts as a cover sheet for the 1095-C forms being sent to the IRS. It summarizes the total number of 1095-C forms being filed and provides employer-level details about the coverage offered.
Filing Deadlines
ALEs must furnish copies of Form 1095-C to employees by early in the year, typically by March 1. The electronic filing deadline with the IRS for both the 1095-C and 1094-C forms usually falls around March 31. Because the IRS occasionally adjusts these dates, it is important to verify the exact deadlines for your specific tax year.
Filing Electronically
The IRS now requires employers filing 10 or more information returns to submit them electronically. Because an ALE filing 50 or more 1095-C forms easily exceeds this threshold, paper filing is generally no longer an option. You will need to generate the forms in your accounting or payroll software and transmit them through the IRS AIR (Affordable Care Act Information Returns) system.
Generating Forms in QuickBooks
QuickBooks Desktop and QuickBooks Online with Payroll offer built-in utilities to generate ACA forms. The software pulls employee data, hours, and coverage information directly from your payroll records to populate the 1095-C and 1094-C forms. Before generating the final versions, review your employee records to ensure health coverage was tracked accurately throughout the year.