Avoiding IRS audits around ACA Compliance: the importance of keeping your employee data current

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Avoiding IRS audits around ACA Compliance: the importance of keeping your employee data currentWhen it comes to providing proof of health insurance coverage for Affordable Care Act compliance reporting, having the correct employee records is crucial. Generally speaking, there is no need to retain payroll records that are over seven years old and 1094-C and 1095-C records over three years old. With this information in mind, how does your company go about maintaining your data and getting rid of information that is not pertinent to current filing? How do you protect your company in the case of an audit?

General payroll practice tells us that payroll information should be kept in your system for seven years. However, according to ACA mandates, 1094-C and 1095-C information should only be kept within your system for three years. Your company could be held liable for any records within your system, even those that are kept after that period of time has passed. For example, your company has information in its system from 15 years ago. If the IRS were to contact you regarding an audit, your company is responsible for whatever information is held within those records from 15 years ago, good or bad, related to the ACA or not. By getting rid of unneeded data and inactive or terminated employees from years unrelated to current business, you are ensuring that only applicable information is there.

Integrity Data’s ACA Compliance Solution your company to download a retention package which holds all documents sent to and received from the IRS as well as copies of all 1094-C and 1095-C forms. By using this retention package, your company always has a copy of ACA records, without needing to keep old information in your system.

Data maintenance is an integral part of protecting your company and ensuring accurate record keeping. By only retaining current payroll and ACA information, you are making sure your company is protected against any errors made before the new ACA employer mandate went into effect so that if an audit does happen, only pertinent information is taken into account by the IRS.

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