Letter 226J under the IRS is given to Applicable Large Employers to make them know they are liable for paying the Employer Shared Responsibility Payment or ESRP. The amount liable is mentioned in Letter 226J that is served to the employer based on the information found in forms 1095-C and 1094-C. These two Forms are filed by ALEs and the individual income taxes filed by the employees of these companies.
What is a Letter 226J Extension and how does it work?
As an employer, you may wonder why you received the Letter 226J? The IRS gets the information you give them on Forms 1094 C and Forms 1095 C. This letter shows you how much you must pay to the IRS for an ESRP. The IRS received the information recorded in Forms 1094 C and 1095 C filed by you as well as the income tax returns filed by the employers of your company. The IRS also check as to whether your employers have been allowed premium tax credit.
Understand what Letter 226J means
The Letter 226J is not a bill- it is a Letter informing you about the amount to pay. The moment you receive the Letter 226J make sure that you read the letter carefully and check all the attachments with it. Make sure you complete the response to the Letter 226J quickly so that you do not incur penalties. In case, you need to apply for a letter 226J extension, hire a professional company to help you with the correct procedure and processes. The company has skilled and qualified professionals to evaluate your case and file the accurate response to the Letter 226J. Always choose a company that has years of skills and experience when it comes to the filing of the extension process for Letter 226J to the IRS.
What should you do if the information contained in the Letter 226J is incorrect or wrong?
In case the Letter received has wrong or incorrect information, you should read the instructions on the Letter carefully so that you can reply accordingly. The letter has to be given to the IRS, and once it is received, they will guide you on how to make the corrections if any. You will subsequently receive an acknowledgment letter that will list out the procedure via which you should file for an appeal to the IRS.
What should you do when you receive Letter 226J?
You should carefully review the data and information that is recorded om Forms 1094C and Forms 1095C for the said year so that the information with the IRS is filed correctly. The information is assessed by the IRS to compute the amount of ESRP that you need to pay to them for the given year.
Remember when you are filing documents to the IRS, you should always keep a copy of the papers and the documents you file. In case you have concerns and queries when it comes to questions about Letter 226J ask the company professionals to help you. The Company will help you with the Letter 226J Extension process in 30 days from the receipt of the Letter so that you effectively file the documents and papers correctly and avert penalties.