PCORI FEE The Complete Guide2025

Part of his role involves ensuring compliance with myriad financial and tax regulations that impact both his firm and its clients. Based on his experience helping clients with tax submissions, the importance of carefully managing the PCORI fee can’t be understated. Read our articles about tax tips for small business and tax accounting. Ship passenger tax is a tax that commercial ship operators need to pay. It’s $3 for every passenger on trips that last more than a day (over 24 hours) on ships with sleeping accommodations for at least 17 people.

Which Health Plans Are Subject to the PCORI Fee?

While a paper form can be mailed to the IRS, electronic filing through an approved e-file provider is more common and often required. With the necessary data collected, obtain the current version of Form 720 and its instructions from the IRS website. Businesses use their gathered information to complete only the sections that apply to their specific liabilities, transferring the figures to the corresponding lines to calculate the tax due. Companies liable for air transportation taxes need to sum the total amounts paid by customers for taxable flights. Retailers of heavy trucks must have the total sales price for each qualifying vehicle sold. Firstly, determine the amount of excise tax you owe for each semi-monthly period within the quarter.

Form 720 consists of multiple parts and lines, each representing different types of excise taxes. Ensure that you accurately report the taxes applicable to your business activities in the appropriate sections of the form. Carefully review the instructions provided by the IRS for each line to understand the reporting requirements. The purpose of Tax Form 720 is to provide information about the excise taxes owed by a business for various goods, services, or activities. IRS Form 720, also known as the Quarterly Federal Excise Tax Return, is a kind of tax form that must be filled by businesses that sell services and goods subject to excise taxes.

Retail tax

They are used to fund various aviation-related expenses like airport maintenance and air travel security. But there are also other types of fuel taxes, one of them being alternative fuels tax. This includes taxes on fuels like liquefied petroleum gas (LPG), compressed natural gas (CNG), and liquefied natural gas (LNG). If the IRS sends you a notice about a penalty after you’ve filed your tax return, you should reply to this notice with an explanation of your situation. The IRS will then review your case to see if there’s a reasonable cause for the issue. Excise taxes are usually (but not always) included in the price you pay for the product.

Which Plans Are Exempt from the PCORI Fee?

• But you can accurately prepare your IFTA reports based on your fuel consumption data and other information on TaxExcise.com.
• The process begins with the business’s legal name, address, and Employer Identification Number (EIN), which must be consistent with other IRS records.
• You should seek professional advice from a tax adviser or legal counsel to ensure proper compliance with the law.
• If you don’t report or pay8 the PCORI fee, you may face penalties similar to those for not filing a tax return.

Accurate filing ensures compliance with tax regulations and helps avoid penalties or interest charges. Because the rate used to determine the fee varies from year to year, you should determine the fee using the instructions for the second quarter Form 720. If you file Form 720 only to report the fee, don’t file Form 720 for the first, third, or fourth quarter of the year. Let us redefine some of the general question exactly what is Form 720? Well before starting with Form 720, let us know that IRS Form 720 consists of three parts, as well as Schedule A, Schedule T, and Schedule C sections and a payment voucher (called Form 720-V).

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This tax calendar covers various due dates of interest to employers. For the IRS mailing address to use if you’re using a PDS, go to IRS.gov/PDSstreetAddresses. Select the mailing address listed on the webpage that is in the same state as the address to which you would mail the return without a payment, Prepare Quarterly Federal Excise Tax Returns Online as shown in the instructions for your tax return. For an EFTPS deposit to be on time, you must submit the deposit by 8 p.m. Additionally, there are special rules for calculating covered lives if you offer multiple self-funded plans or an integrated HRA from a medical insurance provider.

• The federal government charges an excise tax on specific types of products and services, which has to be collected and paid to IRS at regular intervals, quarterly.
• PeopleKeep customers with an HRA can download a report from their admin dashboard prior to the Form 720 due date in late July.
• The key idea here is that these taxes are directly linked to certain types of purchases or activities.
• See How To Get Tax Help at the end of this publication for information about getting publications and forms.

Top If communications, air transportation, and indoor tanning services taxes are collected but not paid to the U.S. Treasury or are willfully not collected, the trust fund recovery penalty may apply. Businesses who owe tax liability for items listed in part I must fill out the Schedule A section of IRS Form 720. This section summarizes the company’s net tax liability, so to complete this section, fill out the sections related to semimonthly payment periods and enter the total.

Certain goods, businesses, products, services, and activities are liable for the quarterly federal excise taxes to the IRS. The owners or responsible parties must report and pay the excise taxes quarterly using the IRS Form 720. The federal excise taxes are now due for the second quarter (April to June). So, Form 720 taxpayers must report and pay their excise taxes on or before July 31, 2023.

Do fully insured plans pay PCORI fees?

The first period covers the 1st to the 15th of the month, and the second period covers the 16th to the end of the month. This regular reporting helps businesses keep track of the taxes they’ve collected and need to pass on to the IRS. Please note that an extension of time to file your return does not grant you any extension of time to pay your tax liability.

Businesses that deal in goods and services that are subject to excise tax need to prepare a Form 720 on a quarterly basis to report the tax to the IRS. Taxpayers must fill out part II of Form 720 if their business sells certain health insurance policies, fishing equipment, indoor tanning services, waterway fuel, or electric outdoor motors. Use the appropriate columns and rates to fill out this section and calculate the total, taking note of the different calculations needed for health plans. Excise tax is often referred to as “sin tax.” The state, local or federal governments can impose these taxes. Are you a small business dealing in goods and services which are subjected to excise tax, like fishing equipment, gasoline, or air transportation? If the answer is yes, then you must have a pretty good idea of what Form 720 is.

This helps ensure that you’ve paid the correct amount of tax and aids in identifying if you owe additional taxes or are eligible for a refund. Excise taxes are usually added to things like gasoline, tobacco, alcohol, or airline tickets. For example, when you fill up your car with gas, a part of what you pay is an excise tax for the fuel. Similarly, when you buy a pack of cigarettes or a bottle of alcohol, a portion of the price includes excise tax. Certain types of coverage are specifically excluded, particularly those that are limited in scope or do not provide comprehensive medical care. Special rules may apply if you are living outside the United States and out of the country when your 6-month extension expires, or serving in a combat zone or a qualified hazardous duty area.