Form 14765, Employee PTC Listing: Correcting Line 14 and 16 Codes

To complete Form 14765, the Employee Premium Tax Credit Listing, work through the IRS-supplied roster one employee at a time: compare each month’s pre-filled indicator codes against your own 1095-C, payroll, and enrollment records, and use the blank columns to enter corrected Line 14 offer codes and Line 16 safe harbor codes for any month where the IRS data is wrong. Return the marked-up listing with Form 14764 by the response date printed on your Letter 226-J.¹ The stakes are real — the proposed Employer Shared Responsibility Payment for 2026 runs $3,340 per full-time employee under Section 4980H(a) and $5,010 per affected employee under Section 4980H(b) — so every correctable month you leave uncorrected costs money.²

What the Listing Actually Shows You

Form 14765 arrives pre-filled by the IRS. Each row is an employee who claimed a Premium Tax Credit for one or more months of the tax year on your Letter 226-J.³ Each name comes with a partially masked Social Security number, enough to match the person to your records without exposing the full SSN.

The grid runs month by month. For every listed employee you can see which specific months drove the proposed penalty and which Line 14 and Line 16 codes the IRS pulled from your original 1095-C filings. Next to those existing codes sit blank columns. Those blanks are where your response lives: any month with a correct entry needs nothing from you, and any month with a wrong entry needs the right code written in.¹

Pull These Records Before You Start

Corrections you cannot back up with documentation tend to unravel later. Assemble the following for every employee on the listing before you touch the form:

The Form 1095-C you originally filed for the employee for the year in question. This is your baseline for spotting where the IRS’s data matches what you filed and where a transposed or wrong code created the problem.
Payroll records showing hours worked. You need these to confirm whether the employee actually averaged 30 or more hours per week (or 130 or more hours per month) during each flagged month.
Signed enrollment forms and written coverage waivers. If an employee declined coverage you offered, only your files can prove it — the IRS has no way to see this.
Affordability documentation for any safe harbor you plan to claim: Box 1 W-2 wages for the W-2 safe harbor, hourly rate or monthly salary for the rate-of-pay safe harbor, or the applicable federal poverty line figure for the plan year.

With these in front of you, each blank cell you fill in has a paper trail behind it.

Correcting Line 14 Offer Codes

Line 14 codes (Series 1) describe what coverage you offered the employee for each month. If the IRS has 1H (no offer) on file for a month when you actually offered coverage, entering the correct Series 1 code in the blank column for that month is what removes the penalty for that month.⁴ The codes most likely to matter on your listing:

1A. A qualifying offer — minimum value coverage where the employee’s required contribution did not exceed the adjusted affordability percentage of the mainland single federal poverty line, with coverage also offered to the spouse and dependents.
1B. Minimum value coverage offered to the employee only.
1C. Minimum value coverage offered to the employee and dependents but not the spouse.
1E. Minimum value coverage offered to the employee, dependents, and spouse. This is what most employers think of as a full family offer.
1H. No offer of coverage. If 1H is correct for a month, that month’s penalty stands.

Write the corrected code in the blank Line 14 column for each month it applies. Leave the column blank for months where the IRS’s existing code is already right.⁵

Correcting Line 16 Safe Harbor and Status Codes

Line 16 codes (Series 2) tell the IRS that a safe harbor or a workforce-status fact protects you for that month even though the employee took a Premium Tax Credit. The ones that most often turn up on a 14765 response:

2F. W-2 safe harbor. The employee’s required contribution for self-only coverage did not exceed the affordability percentage of the employee’s Form W-2 wages.
2G. Federal poverty line safe harbor. The employee’s required contribution did not exceed the affordability percentage of the federal poverty line for a single individual.
2H. Rate-of-pay safe harbor. Affordability is calculated using the employee’s rate of pay.

Enter the applicable Series 2 code in the blank Line 16 column for each month the safe harbor covers. If the employee was not full-time in a flagged month — seasonal, terminated, or below 30 hours a week — use the code that reflects that status so those months come out of the penalty calculation entirely. Write clearly; the IRS reads these entries to recalculate the assessment.

Assembling and Sending Your Response

Your response package has three pieces: Form 14764 (the ESRP Response) marked to show whether you agree or disagree, the corrected Form 14765, and any supporting documentation or written explanation you want the IRS to consider.¹ Send it to the fax number or address printed on the first page of your Letter 226-J. Those contact details vary by case, so use only what your letter provides.⁶

The response date sits on the letter itself. IRS guidance tells employers to contact the employee named on the letter “if you need additional time to respond,” so call before the date passes rather than after.¹ Large listings with hundreds of employees often need an extension. Ask early.

Keep proof you responded. Save the fax confirmation, or mail certified with return receipt. If the deadline passes without a response or an extension, the IRS can finalize the proposed penalty as it stands.

Check the Listing Even If You Plan to Agree

If the IRS has the facts right and you intend to pay, sign Form 14764 to indicate agreement and return it with payment following the instructions in Letter 226-J.¹ The IRS will send Letter 227-J confirming the assessment.⁷

Read the listing anyway. Employers sometimes accept months where an employee had already terminated or was not full-time, simply because they never checked payroll against the grid. A short cross-reference can trim months from the total even when the bulk of the assessment is accurate.

What Comes Back From the IRS

After the IRS processes your corrected Form 14765, you will receive one of several versions of Letter 227.⁷ Which version tells you where you stand:

Letter 227-J. You agreed with the proposed penalty and the IRS is assessing it. Case closed once paid.
Letter 227-K. Your corrections reduced the penalty to zero. No payment owed.
Letter 227-L. The IRS revised the penalty based on your response but some amount remains. The letter includes an updated Form 14765 and a revised calculation, and it gives you a new response date to agree, request a conference with the manager on the case, or appeal.⁸
Letter 227-M. The IRS reviewed your corrections and the penalty did not change. Same options as 227-L: agree, request a manager conference, or appeal.
Letter 227-N. Reflects the outcome of an Appeals review. Case closed on issuance.

If you receive 227-L or 227-M and still disagree, the informal next step is a conference with the IRS manager overseeing your case. Beyond that, you can request review by the IRS Independent Office of Appeals, but put every document and argument on the record before you get there; raising new information for the first time at Appeals sends the case back to the original examiner and delays resolution.⁹

1
Internal Revenue Service. Understanding Your Letter 226-J
2
Internal Revenue Service. Rev. Proc. 2025-26
3
Internal Revenue Service. IRS Form 14765 – Employee Premium Tax Credit (PTC) Listing
4
Internal Revenue Service. Instructions for Forms 1094-C and 1095-C
5
Internal Revenue Service. Form 1095-C – Employer-Provided Health Insurance Offer and Coverage
6
Internal Revenue Service. Letter 226-J
7
Internal Revenue Service. Understanding Your Letter 227
8
Internal Revenue Service. Letter 227-L
9
Internal Revenue Service. Your Appeal Rights and How to Prepare a Protest