Quick Checklist for manual PCORI filing
Employer
Identification Number (EIN)
Business
name and address
Plan year
ending date
Average
covered lives
Applicable
PCORI rate
Payment
method
Step-by-Step Guidelines for Manual PCORI Fee Filing
Step 1: Download the Latest Version of IRS Form 720
- Visit the IRS website and download the current copy of the Form 720. According to the IRS, the PCORI fee should always be reported through the latest Form 720.
Step 2: Provide Your Company Details
- Enter the business name, mailing address, and Employer Identification Number (EIN). Make sure the information matches IRS records to avoid processing delays.
Step 3: Go to Part II, IRS No. 133
- In Form 720, locate Part II, IRS No. 133 - Patient-Centered Outcomes Research Fee. This is where the PCORI fee is reported.
Step 4: Enter the Plan or Policy Details
Under the IRS Number 133, select the proper line from below depending on whether the filing is for:
- Specified Health Insurance Policies, which usually come from insurance companies
- Applicable Self-Insured Health Plans, which usually come from the plan sponsor/employers
- Then input the average number of lives covered in the correct line depending on the date the year ends.
Step 5: Calculate the PCORI Fee
- This is computed by multiplying the average number of covered lives by the applicable PCORI fee rates. The IRS determines the applicable rates depending on the end date of the plan or policy year.
Step 6: Include the Total Fee in Part II
- After computing the total fee, include it in Part II of Form 720.Review the calculation carefully before moving to the payment section.
Step 7: Complete Part III
- Complete Part III to report the total tax, any payments or credits, and the balance due. For PCORI-only filings, the amount generally flows from Part II to the balance due section.
Step 8: Choose How You Want to Pay
- Even if you manually file Form 720 by mail, the payment does not have to be mailed physically. Filing and payment are treated as separate actions.
You can pay in either of these ways:
| Manual Filing Method | Payment Option |
|---|---|
| Mail paper Form 720 | Pay by check or money order using Form 720-V |
| Mail paper Form 720 | Pay electronically through EFTPS |
If paying by check or money order, complete Form 720-V Payment Voucher and mail it with your payment and Form 720. The IRS Form 720-V instructions state that the completed voucher should be sent with the payment and Form 720.
If paying electronically, use EFTPS to make the payment separately. In that case, you can mail the signed paper Form 720 without enclosing a check. Keep the EFTPS confirmation number for your records.
Step 9: Mail Form 720 to the IRS
- Mail the completed and signed Form 720 to the correct IRS address. If a payment is enclosed, include Form 720-V and the check or money order. Always verify the latest IRS mailing address before sending the return.
Step 10: Maintain Evidence of Submission and Payment
Retain copies of:
- Completed Form 720
- Form 720-V, if applicable
- Check or money order information, if paid by mail
- EFTPS confirmation, if made via electronic funds transfer
- Tracking information, if applicable
It will be useful if the IRS requests evidence of either.
PCORI online filing can be completed in minutes. Read our PCORI online filing guide to see how it works.
How to calculate PCORI Fee Amount?
The PCORI Fee is calculated based on the average number of covered lives under your health plan during the plan year. The IRS allows three primary calculation methods for applicable self-insured health plans:
- Actual Count Method
- Snapshot Method
- Form 5500 Method
The final PCORI Fee is calculated using: PCORI Fee = Average Covered Lives x Applicable PCORI Rate.
Important Note About the PCORI Rate
- Use $3.47 per covered life for plan years ending between January 1, 2025 and September 30, 2025.
- Use $3.84 per covered life for plan years ending on or after October 1, 2025 and before October 1, 2026.
PCORI Fee Calculation Methods
Below are the three commonly used methods:
1. Actual Count Method – Count the total covered lives for each day of the plan year and divide by the total number of days in the year.
Example:
- Total covered lives counted during the year: 18,250
- Days in year: 365
Average covered lives = 18250/365 = 50
PCORI Fee = 50 x 3.84 = 192
2. Snapshot Method – Use the number of covered lives from selected dates each quarter and calculate the average.
Example:
- Q1: 50
- Q2: 45
- Q3: 55
- Q4: 35
Average covered lives = 50+45+55+35/4 = 46.25
PCORI Fee = 46.25 x 3.84 = 177.60
3. Form 5500 Method – Use participant counts from the beginning and end of the year reported on Form 5500 and divide by 2.
Example:
- Beginning of year: 50
- End of year: 60
Average covered lives = 50+60/2 = 55
PCORI Fee = 55 x 3.84 = 211.20
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Where to Mail Form 720?
It is always important to check the current IRS mailing address from the official IRS websites before you mail. The current mailing address for Form 720 is,
- Department of the Treasury
- Internal Revenue Service
- Ogden, UT 84201-0009
11 Common Mistakes to Avoid While Filing the PCORI Fee Manually
Filing the PCORI Fee manually through Form 720 requires careful attention to detail. Small mistakes in filing can cause tax notices or result in penalties. Some of the common mistakes in filing PCORI Form 720 are as follows:
- Use of incorrect quarters while filling Form 720. The PCORI Fee is generally reported on the 2nd Quarter Form 720.
- Applying an incorrect PCORI fee rate for the applicable plan or policy year.
- The entry of the wrong number of covered lives during the PCORI Fee computation.
- Missing of the correct IRS No. 133 code that applies to the type of the health care plan.
- Submission of the wrong revision of Form 720 since there is the most recent IRS version.
- Failing to include the EIN of the business or using an incorrect EIN.
- Forgetting to sign the form before mailing the return.
- Making errors in computing the total amount of tax for Parts II and III.
- Making a payment of funds without filling out the Form 720-V when using checks and money orders.
- Sending the return to the wrong address of the IRS.
- Inability to make copies of all documents such as the filed return, payment voucher, and EFTPS notice.
Carefully reviewing the return before submission can help avoid processing delays and unnecessary IRS correspondence.
Filing your PCORI Fee on time will save you from unwanted PCORI Penalties.