2014 Year-End Client Guide

Transcription

1 BDB Payroll Services

2 Welcome to the 2014 Year-End Client Guide Since year-end is fast approaching, BDB has created a comprehensive guide to assist you through the 2014 year-end process. Please review this handbook carefully as it will assist you in processing accurate payroll data. If you have any questions or require further clarification, please contact your customer service representative. A few minutes spent asking the right questions can save hours of aggravation correcting errors caused by inaccurate data input. Allow BDB s team of payroll experts to guide you through a seamless transition into 2015 by helping you prepare for all your year-end payroll needs. Please refer to our 2014 year-end due date schedule to ensure timely payroll reporting for all adjustments and special payrolls. Use the tools in this guide to avoid penalties for missing critical deadlines. Also, please review the 2014 W-2 reporting requirements and submit applicable data to BDB. BDB will begin processing your year-end forms and W-2s after your last payroll in If you would like to hold your year open for further review or additional adjustments, please let us know before your last payroll is processed. The deadline for submitting 2014 adjustments is January 7, Tax Service Clients: Please be advised that any 2014 adjustments submitted after December 29, 2014, may be subject to late tax deposits. BDB will therefore require an Absolution Agreement to be signed. To ensure accurate reporting, please confirm the following: Verify your tax IDs Verify employee social security numbers Submit 2014 W-2 adjustments promptly As always, your client support specialist will be available to assist you with all of your payroll and year-end needs. Please be aware that BDB may experience heavier than usual volume during yearend. Timely planning can help prevent the last minute rush. Thank you in advance for your attention to this process. It is a pleasure working together to make your 2014 year-end a success. As always, we appreciate your ongoing trust and patronage. We look forward to continuing our valued business relationship in Note: BDB assumes no responsibility for providing legal or financial advice regarding the advisability of any of the following transactions. To verify that a payroll transaction is in compliance with applicable Federal, state and local laws and regulations, please check with your accountant or tax advisor. Page 2 of 24

3 Table of Content Welcome to the 2014 Year-End Client Guide... 2 Table of Content... 3 Year-End Schedule... 5 Critical Dates and Important Deadlines... 5 Data Verification... 7 W-2 Verification Report... 7 Federal/State Filing Status... 8 Year-End Delivery... 9 Funding Requirements FUTA Credit Reduction Tax Service Direct Deposit Third Party Sick Pay Special Reporting on W Box 7 Tips Reporting Box 8 Allocated Tips Reporting Box 10 Dependent Care Reporting Box 12 Reporting Box 13 Special Employee Status Box 14 Reporting MISC, 1099-R and Form Services /1096 Filings Filings Amendments and Adjustments Correcting Social Security Numbers on Form W Tax Updates Social Security Page 3 of 24

4 Medicare Pension and Transportation Limits New York SUI Wage Base Limit New York E-File Mandate Minimum Wage Increases Automated Minimum Wage Adjustments Bank Holidays BDB Solutions ACA Compliance Automated New Hire Reporting Electronic Garnishment Payments Employee Self Service (ESS) HR Support Labor Law Posters Paperless Solutions Paperless Checks Online Reports Employee Self Service Direct Deposit EZfee E-reports Pay Rate Notices PTO Tracking Workers Comp Pay As You Go Page 4 of 24

5 Year-End Schedule The processing deadline for payrolls with Federal liabilities of $100,000 or more is 3:00 PM, December 24 with a check date of 12/31/2014 for normal Tax Debit procedures. Clients who wish to wire funds may process payroll until December 29 with a check date of 12/31/2014. Any payroll with a total tax liability of $250,000 or greater always requires a wire transfer. The processing deadline for payrolls with Federal tax liabilities of less than $100,000 (and total tax liability under $250,000) is December 29. Any 2014 payrolls processed thereafter may be subject to additional processing fees and late tax deposits. Critical Dates and Important Deadlines Date Information and Tasks Last day for Tax Service clients funding via ACH Debit to submit payroll Wednesday, with check date 12/31/2014 and federal tax liability of $100, or 12/24/2014 greater. Thursday, 12/25/2014 Banking holiday; BDB will be closed. Last day for Tax Service clients to submit payrolls requiring wire Monday, 12/29/2014 transfers for tax liabilities $100,000 or greater. Last day to submit final payroll for 2014 without incurring any tax penalties for late tax deposits. Monday, 12/29/2014 For Tax Service clients: Clients who submit a payroll after 12/29/2014 with a 2014 check date and a positive tax liability will be required to sign an Absolution Agreement. Thursday, 01/01/2015 Banking holiday; BDB will be closed. Last day adjustments can be recorded for year Any adjustment Wednesday, payroll submitted after 01/07/2015 will incur standard reprocessing and 01/07/2015 necessary amendments fees. Friday, 01/09/2015 BDB will start shipping Quarterly/Year-End forms including W-2s BDB will start uploading Quarterly/Year-End forms including W-2s to Friday, 01/23/2015 Web and Employee Self Service. Monday 2/02/2015 Deadline for distributing W-2s and 1099s to your employees. Friday, 02/20/2015 Deadline for correcting employee information on Form W-2 Please note that any payroll submitted in year 2014 with a year 2015 check date will be recorded in 2015 and reflected on the 2015 W-2. For Tax Service clients: Clients who submit a payroll after 12/29/2014 with a 2014 check date will be required to sign an Absolution Agreement. Page 5 of 24

6 Important for 2014 All employers who filed at least 250 W-2s for the tax year 2013 are required to report the cost of coverage under an employer sponsored group health plan on the 2014 W-2s. This amount will be reported in Box 12 Code DD of Form W-2. This reporting is for informational purposes only and does not mean the coverage is taxable. For a complete chart on what is required to be reported and what should not be reported in Box 12 Code DD, please visit: Health-Coverage Please contact your client support specialist if your company is required to report such cost of health coverage on the W-2. Page 6 of 24

7 Data Verification All data verification should be done before your last payroll in 2014 in order to ensure accurate W-2 processing. Please note that tax agencies may impose a penalty for each W-2 that has a missing or incorrect Social Security number. If you are a 501(c) or government entity, please inform your client support specialist to ensure correct W-3 reporting. To ensure accurate W-2 reporting, please verify the following: Employees names, addresses and social security numbers. Year-to-date and quarter-to-date totals. Please make sure that any manual/prepaid checks issued to employees during the year are recorded by your last payroll. Dates of year-end payrolls and special payroll runs. Employees are coded as Statutory or Pension (Retirement Plan) as required for Box 13 W- 2 reporting. W-2 Verification Report With year-end rapidly approaching, you will soon be receiving your W-2 Verification Reports. Investing the necessary time to review this important tool carefully can ensure a smooth and stress-free year-end experience and prevent hours of difficult retroactive corrections and costly amendments. If any data on the report needs to be changed, please reach out now to your client support specialist and avoid the year-end rush. Page 7 of 24

8 Federal/State Filing Status There are two options a user can select when blocking an employee's withholding tax: 1. Blocked - Wages are taxable and reported to agencies but no tax is withheld. 2. Exempt - Wages are not taxable and are not reported to agencies. Please note that all wages that were processed while the employees filing status was set to EXEMPT will not be reported on any filings/w-2. Please notify your client support specialist if an employee was set up incorrectly so that the wages can be adjusted. Page 8 of 24

9 Year-End Delivery BDB will start shipping Quarterly/Year-End Forms including W-2s on 01/09/2015. For clients with Online Reporting and Employee Self Service, data will be uploaded to these sites as of 01/23/2015. Quarterly/Year-End reports Include: Quarterly Recap Analysis Employee Earnings Records Federal Quarterly Tax Forms State Quarterly Tax Forms W-2 Listing W-2s W-3 Form 940 BDB is now offering the option of Paperless W-2s. You can reprint your employee s W-2 at any time using a PDF attachment. No need to worry about lost paper W-2s anymore. If you have not informed your client support specialist to activate this preferred option, please consider doing so as soon as possible. BDB also supports the option of having additional copies of your Quarterly/Year- End reports sent using different delivery options for each copy. The delivery options are as follows: 1. Send via 2. Print on paper and 3. Upload to Online Reporting (you must activate this service) Please inform your client support specialist if you decide to change your delivery method. BDB will start closing the year as soon as you process the last payroll of the year. Please notify your client support specialist if you would like to keep the year open for additional adjustments. Note: The deadline to notify BDB to hold the year open is prior to processing the last scheduled payroll in Page 9 of 24

10 Funding Requirements FUTA Credit Reduction On November 10, the US Department of Labor released the final list of 2014 FUTA credit reduction states. The following states will be subject to credit reduction: State: Credit reduction: Total FUTA rate: Additional tax per employee* Total tax per employee* California 1.2% 1.8% $84 $126 Connecticut 1.7% 2.3% $119 $161 Indiana 1.5% 2.1% $105 $147 Kentucky 1.2% 1.8% $84 $126 New York 1.2% 1.8% $84 $126 North Carolina 1.2% 1.8% $84 $126 Ohio 1.2% 1.8% $84 $126 Virgin Islands 1.2% 1.8% $84 $126 * For employees earning at least $7,000 If you have employees in a credit reduction state, you will owe additional FUTA (940) taxes at the end of the fourth quarter, If you are a tax service client, you will be debited for the applicable percentage of your FUTA taxable payroll. BDB will notify you of the exact amount of the additional debit in January, For more information about credit reduction, please visit Page 10 of 24

11 Tax Service Your regular funding methods will apply for payrolls with tax liabilities less than $100, For liabilities of $100, or more see chart below: Tax Service Type: Tax Service Client Tax Service Client Tax Service Client Non Tax Service Total Tax: Fund Transfer: Submit By: Payroll to be dated: Up to $250, ACH Debit 12/24/ /31/2014 Up to $250, Wire Transfer 12/29/ /31/2014 Above Wire Transfer 12/29/ /31/2014 $250, Only Any Amount N/A 12/31/ /31/2014 If you regularly have tax liabilities greater than $100, and your Year-End/Bonus payroll falls in the same liability range, your regular funding methods will apply. Please contact your client support specialist if you have any questions. Direct Deposit BDB needs at least 48 hours after processing your payroll to post timely credits to your employees bank accounts. Please be aware that banking holidays and weekends are not included in the 48 hours. Note: To ensure that direct deposit transactions occur timely, please transmit your payroll at least two business days before your check date. Any payroll with a direct deposit total of $250,000 or greater will require a wire transfer to ensure timely transactions. If you regularly have payrolls with direct deposit transactions exceeding this limit, your regular ACH funding method will apply. Page 11 of 24

12 Third Party Sick Pay You are required to record taxable sick pay amounts paid to employees by state disability agencies or other third party providers. Taxes withheld on these payments must be reported if your third party provider does not report it. Third party sick pay will be included on the employee s Form W-2. It is important that you obtain this information from your third party provider as soon as possible. Third party sick pay data must be submitted to BDB on or before your last 2014 payroll in order for it to be included on your 4 th quarter Form 941 and Forms W-2. Page 12 of 24

13 Special Reporting on W-2 Box 7 Tips Reporting Box 7 will contain the amount of tips you reported for the employee throughout the year. This amount is already included in Box 1. Please contact your client support specialist if employee tips have not been reported as tip earnings throughout the year. Box 8 Allocated Tips Reporting If your employees are subject to tip allocation, this box will show the statutory allocation amount. Any amount shown here is not included in Box 1. Please contact your client support specialist if you need to report allocated tips on Form W-2. Box 10 Dependent Care Reporting Please contact your client support specialist if you need to report dependent care benefits in Box 10 of Form W-2. Box 12 Reporting BDB will automatically enter the amounts you reported throughout the year with the appropriate codes in Box 12. Please contact your client support specialist if you have employees who did not contribute to a retirement plan through BDB but are active participants in a qualified plan as defined by the IRS. Box 13 Special Employee Status Box 13 will indicate special employee status. Page 13 of 24

14 Box 14 Reporting Box 14 reporting is optional and may be used to report other information for employee use (e.g. fringe benefit information or YTD parsonage). Please notify your client support specialist if you would like any information to appear in Box 14. Page 14 of 24

15 1099-MISC, 1099-R and Form Services Please notify your client support specialist if you would like BDB to prepare your 1099 forms. BDB will produce the following copies of Form 1099: Copy A Federal copy Copy B Employee copy Copy C Employer copy Copy 1 Employer State copy Copy 2 Employee State copy BDB will generate the forms based on the YTD figures and employee settings. Should you need to adjust the figures, you will need to submit a special 1099 payroll. 1099/1096 Filings BDB will not file 1099-MISC, 1099-R and 1096 for your company. If you are required to file electronically you will need to obtain a TCC (Transmitter Control Code). To obtain a TCC you must file Form 4419 with the IRS. Form 4419 is available on the IRS website or by calling (800) TAX-FORM ( ). 945 Filings Form 945 is an annual federal return for reconciling taxes withheld and deposited on non-payroll earnings (e.g., backup federal withholding and tax withheld on 1099-R and 1099-MISC income). BDB does not produce or file Form 945. You can obtain Form 945 from the IRS website or by calling (800) TAX-FORM ( ). Page 15 of 24

16 Amendments and Adjustments An amendment will need to be filed for any adjustments reported to BDB after 01/07/2015 for all forms/filings affected. Correcting Social Security Numbers on Form W-2 Please notify BDB if you would like to correct a social security number or any employee information on Form W-2 prior to 02/20/2015. You may then manually make the correction on the employee s copies of Form W-2 (copies B, C, and 2). BDB will submit the corrected information to SSA. A W-2c will need to be filed to correct a social security number on the W-2 after 02/20/2015. There will be a $15.00 charge for any BDB reprint of W-2s due to changes in social security number or address prior to 02/20/2015. Any changes submitted after 02/20/2015 will result in charges for filing Form W-2c. Page 16 of 24

17 2015 Tax Updates Social Security The threshold for taxable Social Security wages will increase from $117,000 to $118,500. Both the employee and the employer tax rate for 2015 will remain at 6.2%. Medicare Both the employee and the employer tax rate for 2015 will remain at 1.45%. Employers are required to withhold an additional 0.9% in Medicare taxes on wages earned by employees in excess of $200,000 in a calendar year. Employers are not required to match this 2.35% employee rate but will continue to pay 1.45% in Medicare taxes on all subject wages earned by employees. Pension and Transportation Limits The 2015 limits on the exclusion for elective deferrals for 401(k), 403(b), and 457 plans will increase to $18,000. The catch-up contribution for those ages 50 and older will increase to $6,000. The 2015 excludable amount for employer provided qualified transportation fringe benefits will remain at $250 per month for qualified parking. The monthly limit for transit passes and van pooling will remain at $130 per month. The 2015 annual dollar limit for pretax contribution to Health Flexible Spending Arrangements will increase to $2,550. Page 17 of 24

18 New York SUI Wage Base Limit As of January 1, 2015, the New York State Unemployment wage base will increase from $10,300 to $10,500. Employers pay unemployment insurance tax on each employee s wages up to the wage base limit. The unemployment wage base will continue to increase each year as follows: $10, $11, $10, $12, $10, $12, $11, $12, $11, $12, $11, $13,000 New York E-File Mandate Effective first quarter 2015, all New York employers must file Form NYS-45 electronically. If you are a BDB Tax Service client, you will automatically be in compliance with this requirement. If you are not yet a BDB Tax Service client, please ask your client support specialist for more information about BDB s complete tax solutions. Page 18 of 24

19 Minimum Wage Increases The following 20 states have scheduled an hourly minimum wage increase for 2015: Arizona minimum wage rate will increase from $7.90 to $8.05 effective January 1, Arkansas minimum wage will increase from $7.25 to $7.50 effective January 1, Connecticut minimum wage will increase from $8.70 to $9.15 effective January 1, Delaware minimum wage will increase from $7.75 to $8.25 effective June 1, District of Columbia minimum wage will increase from $9.50 to $10.50 effective July 1, Florida minimum wage rate will increase from $7.93 to $8.05 effective January 1, Hawaii minimum wage will increase from $7.25 to $7.75 effective January 1, Maryland minimum wage will increase from $7.25 to $8.00 effective January 1, Massachusetts minimum wage will increase from $8.00 to $9.00 effective January 1, Missouri minimum wage will increase from $7.50 to $7.65 effective January 1, Montana minimum wage will increase from $7.90 to $8.05 effective January 1, New Jersey minimum wage will increase from $8.25 to $8.38 effective January 1, New York minimum wage will increase from $8.00 to $8.75 effective December 31, 2014 and $9.00 effective December 31, Ohio minimum wage will increase from $7.95 to $8.10 effective January 1, Oregon minimum wage will increase from $9.10 to $9.25 effective January 1, Rhode Island minimum wage will increase from $8.00 to $9.00 effective January 1, South Dakota minimum wage will increase from $7.25 to $8.50 effective January 1, Page 19 of 24

20 Vermont minimum wage will increase from $8.73 to $9.15 effective January 1, Washington s minimum wage will increase from $9.32 to $9.47 effective January 1, West Virginia minimum wage will increase from $7.25 to $8.00 effective January 1, Automated Minimum Wage Adjustments BDB offers Automated Minimum Wage Adjustment for all your employees in Connecticut, New Jersey and New York. You must submit a Minimum Wage Increase Consent Form to opt in to this service. To take advantage of the auto minimum wage increases please complete the form at or send us the accompanying form via fax or . Page 20 of 24

21 2015 Bank Holidays The following are banking holidays. BDB will send a reminder with instructions to arrange an alternate payroll schedule. Thursday, January 1, New Year s Day Monday, January 19, Martin L. King Monday, February 16, Washington's Birthday Monday, May 25, Memorial Day Friday, July 3, Independence Day Monday, September 7, Labor Day Monday, October 12, Columbus Day Wednesday, November 11, Veterans Day Thursday, November 26, Thanksgiving Day Friday, December 25, Christmas Page 21 of 24

22 BDB Solutions Are you taking advantage of our full line of services and features? Look through the list of solutions to see how BDB can help streamline your business in ACA Compliance Are you up to date with Health Care Reform (also known as ACA) and how it may affect your business? BDB is an industry leader in ACA compliance. Our ACA experts keep you up to date on the latest developments so you don t get caught out of compliance. Our specialized services and custom reports offer you solutions that meet all your ACA needs. Automated New Hire Reporting Sign up for automated electronic reporting of new hires with each payroll. No more faxing reports. We report each new hire electronically to the appropriate state, keeping you in compliance with reporting requirements. Electronic Garnishment Payments Are you tired of managing payment of your employee wage garnishments? Let us do the work. With our Electronic Garnishment Payment Service, BDB will automatically calculate, debit, and deposit all your employee garnishments with the appropriate agencies. Employee Self Service (ESS) Empower your employees with secure access to track and print personal payroll history, reports, or paystubs with BDB s Employee Self Service. Save your time spent printing employee paystubs. With our ESS app, your employees can access their pay records at anytime, from any device. HR Support Our website offers guidance on HR essentials such as document management, establishing company policy, and administering employee benefits. We provide Federal and state tax updates and live HR Support with a guaranteed 24 hour turn around. Page 22 of 24

23 Labor Law Posters Are you in compliance with the Federal and state posting requirements? BDB can help. We will provide you with all current Federal and state posters that are required for your industry. Paperless Solutions If you re leading a socially responsible company BDB has many solutions to help your business Go Green! Also consider the increased efficiency and time saving benefits that you ll derive from the paperless options below. Paperless Checks Your checks are ed and ready to print at your office as soon as you process payroll. Never again wait for delivery of your checks. FREE checks provided by BDB. Online Reports Access all your reports securely online, including payroll reports, quarterlies and Forms W-2 Employee Self Service Empower your employees with mobile access to pay-stubs, W-2s, payroll profiles etc. Try 60 Days FREE when you upgrade to paperless checks. Direct Deposit Direct Deposit is by far the preferred payment option for most employees. With Direct Deposit you increase employee retention, reduce the chance of check fraud and reduce paper clutter. EZfee This FREE service automatically withdraws payroll fees from your bank account via direct debit after each payroll run. E-reports Secure s of all your payroll reports, quarterlies and Forms W-2. This is a FREE service. Page 23 of 24

24 Pay Rate Notices NY employers are required to give notices of pay rate to each employee at the time of hire and to all active employees by February 1st of each year. Let BDB do the work. For a minimal fee BDB can complete the notices for you and them to you in PDF format, ready to be distributed to your employees. PTO Tracking Count on BDB to streamline your company s compliance with state paid sick leave laws. Our customized payroll solutions will automatically track the accrual and use of sick leave for each employee. Sick leave accruals can appear on payroll reports and employee stubs for easy tracking. Workers Comp Pay As You Go Enjoy smooth and consistent payments each pay cycle with our pay as you go workers comp system. BDB s workers compensation insurance keeps you in compliance with state requirements. Our system reduces cash flow fluctuations and decreases your audit risk. Page 24 of 24