Wendroff&Associates,LLC

Accounting Tips

Seasonal Employees, the Affordable Care Act, and Your Taxes

For small business owners, seasonal employees can be key to keeping things running smoothly through the winter holidays or the summer. But how seasonal workers affect an employer’s size, especially in respect to the Affordable Care Act, can be complicated.

If your business has at least 50 full-time employees (including full-time equivalents, or FTEs), on average during the year, your business is an Applicable Large Employer (ALE). The big exception: If your employees exceed 50 for fewer than 120 days in a calendar year, your business will not be considered an ALE.

If your business is an ALE, you’ll want to check on your Employer Shared Responsibility Provisions with the IRS. According to the IRS, ALEs are supposed to offer affordable health coverage. “If these employers do not offer affordable health coverage that provides a minimum level of coverage to their full-time employees (and their dependents), the employer may be subject to an Employer Shared Responsibility payment if at least one of its full-time employees receives a premium tax credit for purchasing individual coverage on one of the new Affordable Insurance Exchanges, also called a Health Insurance Marketplace (Marketplace),” the IRS details.

The Employer Shared Responsibility Provisions went into effect in January 2015, and for some businesses, 2016 may be the first calendar year this part of the tax code affects them. If you aren’t certain about your business ALE status, whether you need to provide benefits and more, check with a qualified accountant and tax planner. If your business is poised to grow in 2017, this fall is a great time to prepare.