Form 14765

What is IRS Form 14765?

IRS Form 14765 is a tool used by the Internal Revenue Service (IRS) to communicate specific information about employees who may have triggered a penalty, or an Affordable Care Act Employer Shared Responsibility Payment (ESRP). Employers receive this form if one or more of their employees obtained a premium tax credit.

The form itself provides details about each employee who was offered coverage, including the offer's cost and whether the employee chose to participate in the coverage or opted to take a premium tax credit from the government marketplace instead.

Understanding employee premium tax credit

An integral component of IRS Form 14765 is the Employee Premium Tax Credit (PTC). The PTC is a refundable credit that eligible individuals can use to lower their monthly insurance premiums. If an employee does not receive a sufficient health coverage offer from their employer, they can opt to purchase insurance through a government marketplace and receive a premium tax credit.

Importantly, if an employee claims this credit, it can potentially trigger an ESRP for the employer, especially if the coverage offered by the employer is not considered "affordable" or doesn't provide "minimum value" as per ACA's guidelines.

Deciphering form 14765 codes

One of the complexities of IRS Form 14765 is understanding the form 14765 codes. Each line of Form 14765 corresponds to an employee, and column (b) of the form contains a two-character alpha-numeric indicator code.

These codes provide information about the type of coverage offered to each employee, the employee's share of the lowest cost monthly premium, and the safe harbor or other relief applicable to the employee, if any. Understanding these codes is crucial for employers as they help identify potential discrepancies or issues that could lead to ESRP penalties.

IRS Form 14765 Instructions: Completing the Form

The process of completing IRS Form 14765 is actually quite straightforward as it's a form provided by the IRS to the employer, not a form the employer must complete and submit.

When you receive IRS Form 14765, it means the IRS has identified employees who may have triggered a potential ESRP for your business. In response, you need to review the form carefully, confirm the accuracy of the information presented, and, if necessary, prepare a response. If you disagree with the data provided, you need to use the IRS-provided Form 14764 (ESRP Response) to clarify or correct the information.

If you find discrepancies in the information or disagree with it, you need to prepare a response. This is crucial because it can help you avoid a potential ESRP.

To communicate your response to the IRS, use Form 14764, also known as the ESRP Response. This is the form where you can provide any necessary corrections or clarifications to the information presented in Form 14765.