Entities sharing the same EIN (Employer Information Number) may be setup as separate companies within the ACA Compliance solution. In some industries this is a common practice – staffing firms like to setup difference companies to handle their permanent staff as opposed to the temporary staff. In these cases two companies are established with their own company ID but they share a common EIN number.
These companies may or may not be part of an aggregated ALE groups where they are members of a commonly controlled or affiliated group. The issue this poses is how one sets up these scenarios in ACA Compliance in order to get the IRS Form 1094-C to populate with the right information. The information below provides a framework of how the ACA Compliance solution works and how to setup the entities in order to achieve the right reporting. This information is not applicable to DGE (designated government entities) as they have unique reporting requirements in preparation of IRS Form 1094-C.
Companies with the same EIN number can submit multiple transmissions to the IRS – either in paper form or electronically. The key here is that one of them must designate itself as the authoritative transmitter for that ALE which will include the total employee counts in Part III of the IRS Form 1094-C and the total number of 1095-C submissions for the entire EIN group on line 20. For the non-authoritative transmitter, they will not fill in Part III and line 20 will be blank. In the case of the non-authoritative submission, the IRS Form 1094-C acts as the transmittal manifest with only the number of 1095-C being included in that particular transmission for that company name identified in line 18. Every company, both authoritative and non-authoritative will report the number of 1095-Cs for the company name on line 18. Only authoritative will report on line 20 and that will be the total 1095-Cs submitted for the Combined group under that EIN. Only the Authoritative will be reported on Part IV.
Scenario 1: A single entity setup two different Company ID’s in the ACA Compliance solution. They both share the same EIN and are not part of a commonly controlled or affiliated group. For reporting purposes, each of the Company IDs was setup as its own Group ID. A Group ID of ACME was setup to combine the two companies when doing consolidated reporting.
|Company ID||Company Name||EIN|
|ACME1||ACME Personnel Services||11-2222222|
|ACME2||ACME Personnel Services – PR||11-2222222|
The ACME1 Company processes payroll for temporary employees while the ACME2 Company is used for their internal staff payroll. One of these Company IDs must be designated as the authoritative transmitter for this ALE member. There are not rules for this designation so we will use ACME1 as being the authoritative transmitter. In the 1094-C Prerequisites it will be setup like this:
Notice how in the second question, Is ALE Member a member of an Aggregated ALE group, the answer is NO. This ALE is a single entity and although they may be transmitting multiple submissions, one for ACME1 and another for ACME2, they are treated as a single ALE.
When generating the information for IRS Form 1094-C, the ACA Compliance solution will combine totals based on EIN number consolidation, not by each company ID. This is a great feature as it allows flexibility in setup for different scenarios yet assures the information reporting on IRS Form 1094-C for the ALE is correct.
Part IV of IRS Form 1094-C will be blank in both submissions.
Scenario 2: One entity setup two different Company ID in the ACA Compliance solution that share the same EIN number. There were two other commonly controlled entities setup with their own separate Company ID and unique EIN number.
|Company ID||Company Name||EIN|
|SAN2||Sanabell Dairy Farm||22-2222222|
|MKT||Dairy Market of Sanabell||44-4444444|
SAN1 will be designated the authoritative transmitter for SAN1 and SAN2. The other two entities will act as their own authoritative transmitters. A Group ID of COMBINED was setup that included all common control companies.
The 1094-C prerequisites will be setup as follows:
Each of these company IDs will submit their 1095-Cs separately. The rule for scenario 1 also applies here in regards to SAN1 and SAN2. For SAN1, line 20 and Part III will be populated. For SAN2, line 20 and Part III will be blank. For PRO and MKT, line 20 and Part III will be populated.
These separate entities have identified themselves as being a member of a commonly controlled or affiliated group. As such SAN1, PRO and MKT must fill in Part IV of IRS Form 1094-C on each of their transmittal form listing the other ALE members. The order of listing is based on the member with the highest employee count in descending order. SAN2’s IRS Form 1094-C will not have Part IV filled out.
This architect of consolidating by EIN numbers provides the ACA Compliance solution to be tailored to a number of different reporting scenarios where they may be the same company reporting separately by division and may or may not be in a commonly controlled group. This focus on the EIN as being the consolidation vehicle for a single ALE ensured that the authoritative transmitter for a single EIN will have the combined totals reported regardless of how many other Company IDs share the EIN.
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Last Review: 9/3/2020 – Revision: 2.0
Applies To: ACA Compliance Solution
Categories: 1094-C Year End – Prerequisites
Keywords: Multiple, Sharing, EIN