The end of 2023 is quickly approaching, but there is still work to do to ensure a smooth year-end. Putting in a little time before your final payroll of the year will help prevent expensive, time-consuming adjustments later on.
BEFORE YOUR LAST PAYROLL OF 2023
- Review your Employee Data – Before issuing W-2’s, you must verify that employee information is accurate and up to date. AccuPay’s iSolved clients can find the “Employee W2 Verification” report under Reporting/My Reports. (If you are not currently working with AccuPay, ask your payroll provider for a report showing details of all employees paid during 2023). Be sure to double check the following for all of your employees:
- Name – Check spelling and any name changes made during 2023.
- Social Security Numbers – Make sure SSN’s are entered and accurate. SSN’s starting in “9” are not valid for filing unemployment taxes or W-2’s. (These are actually ITIN’s and not SSN’s.)
- Addresses – Request updated addresses from current and terminated employees to ensure any mailed W-2’s will be received timely.
- SOC codes – Several states, including Indiana, are now requiring employee SOC codes be entered when submitting unemployment (SUTA) tax returns. Be sure to update this information in the payroll software (or submit a list to your payroll specialist if you are not online). Visit the Bureau of Labor Statistics to determine your employees’ codes. We recommend providing this information for all employees – even those who do not work in the affected states – as we anticipate more states will require this information in the future.
- Review your Payroll Data – Making sure your payroll information is accurate and complete before your last payroll of the year is essential for your payroll provider to create accurate W-2’s. Review the list below and be sure to report any applicable information to your payroll specialist. (See AccuPay’s Year End Guide for more information.)
- Wages – Make sure you have recorded all taxable wages for each employee. Report any checks issued to employees outside of payroll to your payroll specialist as soon as possible.
- Personal Use of Company Vehicles – Personal use of company vehicles is taxable income. AccuPay has created user-friendly forms for easy calculation and reporting.
- Employer Insurance – If you had 250 or more W-2’s in 2022, and pay a portion of your employees’ health insurance, the 2023 amounts must be reported on the W-2.
- Third Party Sick Pay – If you had employees earning taxable income from third party injury/disability insurance, be sure to forward any statements issued from the vendor to your payroll specialist. Identify whether the vendor will create the sick pay W-2. (Be sure to notify your payroll specialist of these wages even if you don’t yet have the report from your vendor.)
- S-Corp Health Insurance – S-Corps must report any health and/or long-term care insurance premiums paid for 2% or more shareholder employees. See Form B in AccuPay’s Year End Letter.
- HSA Contributions – If you contributed amounts to employee HSA accounts outside of payroll (employer contributions) you must report these amounts to your payroll specialist for accurate W-2 reporting.
- ACA – If you are required to complete annual ACA reporting, be sure that any “variable hour” employees have hours recorded (at least monthly). (These are any employees not classified as “full-time.”) If you are not sure whether you are required to complete ACA reporting, check with your payroll specialist. In general, employers with 50 or more full-time equivalent employees must report. (See ACA – What Employers Should Know on our blog.)
- Retirement Plan Information – Employees who are “active participants” in your company’s retirement plan must be identified on the W-2. Those who do not contribute or receive an employer match in payroll may need to be identified by you as participants. Be sure to report these employees to your payroll specialist. (See Form C in our Year End Letter.)
ADDITIONAL CONSIDERATIONS
- Be on the lookout for Unemployment Tax Rate (Merit Rate) notices. Many states begin sending these out in November for the following year. If you are using a third-party to process your payroll, don’t assume that they will receive this information. Forward a copy to your payroll specialist as soon as it is received to ensure the correct rate is withheld on the first payroll of 2024.
- In addition to merit rate notices, you may also receive a notice showing your tax filing and/or payment frequency has changed for 2024. Make sure to pass this information along to AccuPay or whomever is responsible for paying your payroll taxes.
- Before processing your first pay of the year, verify Indiana employees’ local taxes are correct based on the employee’s home address as of January 1, 2024. (See our IN County Tax Guide.)
- Review Your Tax Profile – With the increase in remote workers, many employers open tax accounts with state and local agencies that are only needed on a temporary basis. Some locals, such as those in Kentucky or Ohio, may require an annual license fee to do business there, so be sure to close any tax accounts that will not be needed for 2024 withholding. Most closure forms can be found online.(If you had 2023 liabilty, make the effective date 12/31/2023.) Contact your Payroll Specialist with any questions.
- Consider Giving Your CPA access to Your Payroll Reports – If you work with AccuPay, you have the option of providing your CPA or accountant with a secure login to pull payroll reports and quarterly payroll tax returns. We can even set up an email to notify him or her when payroll has been processed. This can save you considerable time if you are currently downloading and forwarding reports on a regular basis. Ask your Payroll Specialist for more information.
WE’RE HERE TO HELP
If you are a current AccuPay client, AccuPay’s team of Payroll Specialists is invested in making sure your year-end runs smoothly. If you have any questions or need assistance as you work through the items listed above, contact us at 317-885-7600 or via email at payroll@accupay.com. You may also email your Payroll Specialist directly. Be sure to complete the AccuPay Year End Guide by the December 1 deadline to ensure your payroll year-end runs smoothly!
If you would like more information about AccuPay contact us at info@accupay.com.
