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Calculating Whether Your Higher Education Institution Is an “ALE”

In our last blog post, we looked at some of the results from our annual Higher Education Tax Reporting Trends Project survey. One of the key statistics is that 58.29% of participating schools stated that they are “Applicable Large Employers” (ALEs) for the purposes of the Affordable Care Act.

By enrollment size, the responses were:

  • Under 500 students – 42.11%
  • 500 – 1,700 students – 66.67%
  • Over 1,700 students – 75.00%

ALEs have significant reporting requirements, including Form 1095-C. That means it is crucial for higher education institutions to document whether or not they have more than 50 full-time equivalent (FTE) employees for years beginning with 2014.

We’ve talked with many institutions that believe they are not an ALE because they don’t realize that “FTE” includes more than just “full-time employees.” Unfortunately, miscalculating can result in potentially large penalties.

We encourage you to download the 2016 Higher Education Tax Reporting Trends Project white paper for more on this topic, including information on a new Employer Shared Responsibility Provision (ESRP) Estimator from the Taxpayer Advocate Service. The white paper also includes data and insight on other key higher education tax reporting issues.

Our team of dedicated higher education specialists can help you with ALE calculations and much more. Learn more about our higher ed services here or by contacting us to discuss your specific needs.

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Dave Moja

Dave is dedicated to meeting client needs in the exempt organization tax arena through review of client returns, consulting engagements, training, and the compilation of the annual CapinCrouse Higher Education Tax Reporting Trends Project. He has 29 years of accounting experience and serves several industry committees, including the AICPA Not For Profit Advisory Council. Dave has also served on the IRS Advisory Committee on Tax Exempt and Government Entities (ACT).

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