Response Desk/Letter 226-J
IRS Notice Letter 226-J · ACA Employer Shared Responsibility

Letter 226-J proposes an ACA employer penalty. The numbers are large.

This letter proposes an Employer Shared Responsibility Payment under the Affordable Care Act. Proposed assessments routinely reach six or seven figures — and they are frequently overstated.

30 days
Typical deadline
Tier 3
from $1,495
15 min
Free triage call
Book a triage call All notice types
What it is

What a Letter 226-J actually means

Letter 226-J is sent to Applicable Large Employers when the IRS believes they failed to offer adequate, affordable coverage and at least one employee received a premium tax credit. It proposes a penalty based on the IRS's read of your Forms 1094-C and 1095-C.

These proposals are often inflated by coding errors on the original filings — a wrong Line 14 offer code or Line 16 safe-harbor code can manufacture a penalty where none is owed. The response (Form 14764 plus a corrected employee roster on Form 14765) is highly technical.

Why you might have received one

  • Incorrect offer-of-coverage codes on Line 14 of Form 1095-C
  • Missing affordability safe-harbor codes on Line 16
  • An employee claimed a premium tax credit despite a valid offer
  • Full-time employee counts overstated on Form 1094-C
What's at stake

The proposed penalty becomes assessable if you don't respond within 30 days. Because the assessments are so large and so often driven by clerical coding, a precise, well-documented response can reduce the penalty dramatically — frequently to zero.

Common mistakes we see

  • Paying a proposed penalty driven by a 1095-C coding error
  • Responding without correcting the underlying ACA codes
  • Missing the 30-day window on a six-figure proposal
  • Treating it like a routine notice rather than a technical ACA matter
Transparent, flat-fee pricing

You'll know the cost before we start

No hourly surprises on routine notices. We confirm the tier on your free triage call and put the fee in writing.

Tier 1
$295 flat fee

Simple notices

  • CP501, CP14, balance-due reminders
  • Notice review & deadline confirmation
  • One drafted response letter
  • Filed on your behalf
Tier 2
$595 flat fee

Underreporter & matching

  • CP2000, CP2030, AUR notices
  • Line-by-line reconciliation
  • Substantiation package assembled
  • One free follow-up within 90 days
Tier 3
from $1,495 scoped quote

Urgent & high-stakes

  • CP3219A, CP504, Letter 226-J
  • Tax Court petition support
  • Penalty abatement requests
  • Direct IRS / DOR representation
Tier 4
$350 per hour

Examination & appeals

  • Full audit representation
  • Appeals conferences
  • Complex multi-year matters
  • Quoted in writing before work begins
Common questions

Before you call us back, read this

Our 226-J penalty is huge — is it real?
Often it's inflated by coding errors on your 1095-C forms. Correcting the offer and safe-harbor codes frequently reduces or eliminates the proposed penalty.
How do we respond?
Through Form 14764 and a corrected employee roster on Form 14765, supported by documentation of the coverage you actually offered. It's technical work — the codes have to be exactly right.
What's the deadline?
Generally 30 days from the date of the letter. Given the dollar amounts, the response should start immediately.
Why is this Tier 3?
It requires ACA-specific analysis, corrected information returns, and direct correspondence with the IRS ESRP unit. We scope and quote it on the triage call.

Respond to your Letter 226-J the right way

Book a free 15-minute triage call. We'll identify the notice, confirm your deadline, and quote the work in writing — no obligation.

Book a free 15-minute triage call