Smart Benefits: How to Respond to a Letter 226J
Rob Calise, GoLocalProv Business/Health Expert
Smart Benefits: How to Respond to a Letter 226J

Letter 226-J is the initial letter issued to Applicable Large Employers (ALEs) to notify them that they may be liable for an Employer Shared Responsibility Payment (ESRP). The determination of whether an ALE may be liable for an ESRP and the proposed amount in Letter 226-J are based on the information reported on Forms 1094-C and 1095-C filed by the ALE and the individual income tax returns filed by the ALE’s employees.
If you receive a letter, according to the IRS, here’s what you need to do:
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLAST- Carefully read your letter and attachments since they explain the ESRP process and the steps to take if you agree or disagree with the proposed ESRP computation.
- Complete the response form (Form 14764) indicating your agreement or disagreement with the letter.
- If you disagree with the proposed ESRP liability, provide a full explanation of your disagreement and/or indicate changes needed on Form 14765 (PTC Listing). Return all documents as instructed in the letter by the response date.
- If you agree with the proposed ESRP liability, follow the instructions to sign the response form and return with full payment in the envelope provided.
For answers to common questions about Letter 226-J, visit the IRS website.

