Year End Guide 2015 Precision Payroll of America (PPA) would like to take this opportunity to thank you for your business and to wish you a happy holiday season and a prosperous New Year. Please review this year end guide carefully to ensure that you are aware of any and all action items that may affect your company. Following the guidelines and meeting the deadlines in this guide will allow us to ensure accurate year end reports and timely filings with the various tax authorities. At Your Service.
Dear Payroll Client, It is that time of year again and year end is upon us! This document is a crucial part of our fourth quarter and year end processing which will guide you to a smooth and successful year end. Please read this document carefully and respond to us with any notifications and/or adjustments as soon as possible. As always, if you have any questions that are not addressed in these documents, or need further clarification, you may contact your Payroll Specialist. Thank you for choosing us! Precision Payroll of America Team Table of Contents Important Deadlines, Holidays & Email Addresses Page 3 Year End Adjustment Processing Deadline (Dec. 11) Page 3 How to Review Employee Information and Schedules Page 4 Vacation, Sick, PTO Review Page 5 1099 Miscellaneous Forms Page 5 Bonus/Holiday Checks Things to Consider Page 5 Health Care Reporting for W 2 s (Large Employers) Page 6 Tax Changes for 2016 Page 6 Do s and Don ts Page 7 State Unemployment and Deposit Frequency Notices Page 8 W 2 and 1099 Deadlines Page 8 Important Tips about your W 2 Verification Report Page 8 ACA Compliance Services Page 9 End of Year CD Page 11 Additional Services Order Form Page 12 2 P age
Important Deadlines for Year End December 11 Review year end guide and respond with any changes or adjustments December 31 Last day to process 2015 Payrolls January 25 W2 s and 1099 s delivered to clients no later than this date Upcoming Holidays November 26 Thanksgiving Holiday; PPA and Banks are closed November 27 PPA Closed Thanksgiving Holiday December 24 PPA Closes at 12pm CST December 25 Christmas Day; PPA and Banks are closed January 1 New Year s Day; PPA and Banks are closed January 19 Martin Luther King, Jr. Federal Holiday; Banks are closed Important E mail Addresses Web Department Payroll Processing Department Tax Department payroll@precisionpayroll.com payinput@precisionpayroll.com taxcentral@precisionpayroll.com Year End Adjustment Processing Deadline Notify us no later than December 11, 2015 of any year end payroll adjustments. This will provide sufficient time to record adjustments prior to your last payroll of 2015. We understand that some information related to closing your 2015 payroll records may not be available by this date, but keep in mind that reporting adjustments after your last payroll in 2015 could delay your 4 th quarter and year end returns as well as incur additional processing fees. Examples of adjustments are as follows: Void and/or manual checks Third Party Sick Payments Fringe Benefits (Example: Auto Allowance, Life Insurance Premiums, SubS Health Insurance) Year End Distributions Bonuses and other gifts given to employees Health Insurance Premiums (only for employers who filed 250 or more W 2 s in 2014) Vendor 1099 payment recording 3 P age
How to review and confirm accuracy of your company and employees information: Employee W2 Information Internet Clients (Web Clients) 1. Log into the Payroll Module 2. Select Web Reports 3. Select Emp. W2 and SSN 4. Select to open the report in PDF, Excel or Word 5. Print and review report 6. Make updates in payroll prior to processing your final payroll of 2015 Non Internet Clients: Contact your Payroll Specialist for your company s Employee W2 Verification Report. Incorrect information can affect your employee s W2 filing and Social Security Wage benefits. This can also incur additional fees for corrections made after the 2015 payroll year has closed. Payroll Schedules for 2016 Schedules are determined based on your current company policy but can be thrown off when holidays occur and when check dates fall on weekends. Your 2016 Schedules are available for review now. Internet Clients (Web Clients) 1. Log into the Payroll Module 2. Select Payroll 3. Select Dates 4. Select View Company Schedule 5. Select to open the report in PDF, Excel or Word 6. Print and review the report and notify Precision Payroll of any changes that need to be made. Non Internet Clients: Contact your Payroll Specialist for your Company s 2016 Payroll Schedule 4 P age
Vacation, Sick and/or PTO Balances The system default is that all employee vacation, sick and PTO balances will be reset to zero after the first payroll in January, unless prior communication regarding carry over has been received. If you have communicated your carry over preference in past years, your balances will carry forward accordingly. If you have not carried forward balances in the past years but would like to start doing so this year, contact your Payroll Specialist prior to the end of December. 1099 Miscellaneous Forms If you have paid 1099 Miscellaneous Income through the payroll system in 2015, Precision Payroll will produce these forms. If you have additional 1099 s (for vendors or contractors who were paid earlier in the year and not reported), enter them using manual adjustments before you process your last payroll in 2015. Always use 1099 Earnings codes to pay 1099 contractors and/or vendors in the payroll system to ensure that the 1099 tax forms are generated properly. Bonus/Holiday Checks Things to Consider 1. Run bonus checks as separate checks on the same payroll run or as a separate pay run altogether. Run them as a separate payroll altogether so you can use global settings to make the process more efficient. If you run them on the same payroll as your normal checks, the bonus amounts are going to show in the YTD s on the check stub, and you give away the surprise. 2. If you are running a separate payroll, clearly communicate what the check date for the bonus payroll run should be. Should it be the same as your normal payroll check date? Should it be the date of your holiday party? Should it be a different date entirely? 3. Tell us which deductions, if any, should come out of the bonus checks. Some employers withhold only taxes on bonuses, whereas some employers have 401(k) contributions calculate on bonuses. 4. Pick a tax frequency or percentage. Do you want to take out a lot of withholding taxes, a little bit or none at all? This is particularly important on larger amounts, which you may want to tax on a quarterly or annual frequency rather than your normal one. If you go the percentage option for federal withholding which is 25% of gross (that is the IRS guidelines for supplemental wage taxation.) State withholding percentage varies depending on the state. 5. Let us know if the checks should be grossed up. Do you want employees to receive a nice, round figure (and no, we re not talking about 0 ) as their net check? If you do, would you like us to grossup the check for just FICA/MEDICARE taxes or for withholding taxes as well? Contact your Payroll Specialist. 5 P age
6. Specify whether you would like the bonus checks to be Paper Checks or Direct Deposit Vouchers. 7. Keep in mind that if your employees access their checks stubs online, those bonus check stubs will be posted when payroll is run. If you do not want the employees to see the bonus check stubs online, let us know in advance so we can turn off the Check Stub View for the employees that week. Health Care Reporting on W 2 Requirement for Large Employers If your company filed more than 250 W 2 s in 2014, the ACA W 2 reporting requirement applies and you are responsible for reporting the total costs (regardless of employee paid portion vs. employerpaid portion) of health insurance on employee s 2015 W 2 s. Typical costs to include are those on behalf of the employees for group health insurance plans. Since this information may not be available until after the close of the 2015 calendar year, we ask that you compile a list of employees and their premiums in January 2016 and send us the spreadsheet by January 15 th so we can add those values to their W 2 s. Tax Changes for 2016 401K Contribution Limits: Remains at $18,000 for 2016 with Catch Up to $6,000 for employees age 50+ Simple IRA Limits: Remains at $12,500 for 2016 with a Catch Up to $3,000 for employees age 50+ HSA Limits: Self Coverage remains at $3,350; Family Coverage increases to $6,750 Look for the December 2015 Newsletter for further tax announcements. 6 P age
Voided Checks Manual Checks Address Changes Topic Do Don't Do void 4th Quarter checks on or before your last payroll process for 2015. Do enter them on or before your last payroll for 2015. Do make all address changes on or before your last payroll process in 2015. Payroll Calendar Do verify payroll processing schedule/calendar by 12/11/2015. Verification Report Web Clients Only: Do review the following under Web Reports and Company Setup: Emp W2 and SSN Report Emp W 2 Verification Report Tax ID's and Rates Non Web Client: Contact your Payroll Specialists for report. 1099 Information Before you process the last payroll in 2015: Web Clients enter 1099 earnings online Non Web Clients submit 1099 earnings to your Payroll Specialist Payroll Tax Information Do send all payroll tax documents received from Federal, State and/or Local Tax Authorities to the Tax Department. Group Term Life (GTL) Do enter on or before your last payroll process in 2015. Third Party Sick Pay Fringe Benefits Send all 3rd Party Sick Pay to your Payroll Specialist on or before your last payroll process for 2015. Do report any additional fringe items on or before your last payroll process for 2015. Do not void prior quarter checks. Contact your Payroll Specialists to let them know about prior quarter checks to be voided. Do not enter negative manuals for prior quarter without contacting your Payroll Specialist. Address changes made in 2015 will not change the address on the W 2 in 2015. Contact your Payroll Specialist to make any 2015 address change. Do not enter GTL on terminated employees or use manual adjustments for 2015 figures after the last 2015 payroll. Contact your Payroll Specialist for instructions. Do not enter manual adjustments after last 2015 payroll process. Contact your Specialist for processing. 7 P age
State Unemployment Rate and State Deposit Frequency You will be receiving your 2016 State Unemployment Rate and your Federal and/or State deposit frequency change during the next two months. Once you receive these notices, fax them to the Tax Department at 800 878 5648. This will ensure the accuracy of your tax liability calculation and timely deposits to the tax agencies. W 2 and 1099 Deadlines W 2 s will be shipped to your offices no later than January 25, 2016. The form will be in a separate package labeled W 2 s enclosed. If you are a paperless client, paper W 2 s will be delivered to the address on file. 2015 Year End CD In February 2016, we will prepare a CD with 2015 payroll information. The disc contains: Reports of every payroll run Quarterly Tax Returns Employee Check Stubs Copies of all W 2 s and/or 1099 s Employers are required by law to retain copies of all payroll information for seven (7) years. Attached is an order form for the 2015 CD (page 9). IMPORTANT TIPS ABOUT YOUR W 2 VERIFICATION REPORT All Terminated employees will be deleted from the Payroll Master File on the first payroll run of 2015. To retain any Terminated employees, the employee s status must be changed from Terminated to Inactive status. Inactive employees are not deleted from the Payroll Master File. W 2 Pension will automatically switch to Yes if the employee has a 401K, Simple Plan, or any other retirement plan deduction from their paycheck. Anything other than that will need to be switched by the payroll processor or you can do that yourself (if you are on the web.) 8 P age
ACA Compliance While employers with 50 or more full time equivalents are responsible for offering health care coverage, starting in 2015, they are also responsible for reporting under Sections 6055 and 6056 on the offer of coverage to each individual as well as other plan details. Employers who Self Insure/Self Fund for health care must also file, even if there are fewer than 50 employees. PPA s ACA Compliance Services Precision Payroll of America offers the choice of services to all our clients: Compliance Management Services ALE Testing (For Fully & Self Insured) ACA Full Time Look Back Report ACA Pay Period Detail Report New Hire / Term Coverage Summary ACA Affordable Coverage Determination Report Federal Poverty Line Safe Harbor Analysis 1094 B & C Reporting & Filing 1095 B & C Reporting & Filing DIY with Consulting Services Assist all types of Employers Self Management Tools ACA Full Time Look Back Report ACA Pay Period Detail Report New Hire / Term Coverage Summary Advising on Reporting /Filing Access to legal advice on ACA Access to ACA Filing Forms 9 P age
What ACA Forms need to be filed? To help you navigate to the necessary forms, or to simply explain the ACA forms that need to be filed, see the table/links below. ACA Forms: 1094 B 1094 C 1095 B 1095 C Form Purpose Who Files? Who Receives? Deadline Notes 1094 B Cover sheet that accompanies the 1095 B Forms Health insurance issuers or carriers IRS February 29, 2016 (leap year) Must be filed with Form 1095 B Small, self insured employers March 31, 2016 for electronic filers 1095 B Statement indicating which months the individual and any dependents were covered by Minimum Essential Coverage 1094 C Cover sheet that accompanies the 1095 C Forms Summary information for each employer including certifications of eligibility, aggregate group member information and any transition relief that may apply 1095 C Statement reporting on offers of health coverage and enrollment in health coverage for employees For self funded employers, reports which months the individuals and any dependents were covered by Minimum Essential Coverage Health insurance issuers or carriers Small, self insured employers Applicable Large Employers (ALE) those with 50 or more full time employees (including full time equivalent employees) ALE (Employers with 50 or more full time employees [including full time equivalent employees]) IRS Employee/ Health plan participant February 29, 2016 (leap year) March 31, 2016 for electronic filers IRS February 29, 2016 (leap year) IRS Each full time employee March 31, 2016 for electronic filers February 29, 2016 (leap year) March 31, 2016 for electronic filers Employee February 1, 2016 (due to January 31, 2016 falling on a Sunday) Send to last known address May provide electronically with recipient s affirmative consent Must be filed with Form 1095 C Reports summary information for each employer Used in determining whether an employer owes a payment under the employer shared responsibility Send to last known address May provide electronically with recipient s affirmative consent Used to determine eligibility of employees for the premium tax credit Reporting Deadlines: 1095 C to Employees January 31, 2016 1094 C to IRS w/ 1095 C s February 28, 2016 Paper Filing March 31, 2016 Electronic Filing IMPORTANT! You must notify and register with Precision Payroll by November 30 th, 2015. The data requirements are extensive and lead time is CRITICAL. Contact Tom Sodeika at 630 242 1507 to register. 10 P age
STORE A YEARS WORTH OF PAYROLL ON A CD WITH VIEWCHOICE! ViewChoice, designed for Precision Payroll clients, enables you to view, gather, and store payroll records. Imagine storing an entire year of payroll records for your company electronically! Save time from accessing, printing and sending records, plus gain vital storage space. ViewChoice CD contains all payroll documents including: Payroll reports Check stubs W 2 forms Tax returns Don t miss your opportunity to get easy access to your records today! For more information, contact Gary Young, 630.242.1522 gyoung@precisionpayroll.com Yes! Please send me my 2015 Payroll on CD! Company size: Price 1 25 employees $98.00 26 50 employee $118.00 51+ employee $168.00 Company name: Company code (4 digits): Contact name: Fax order form to 630.887.0735 or email to gyoung@precisionpayroll.com. 11 P age
ORDER FORM Order no. Date: Ordered By: Company: Telephone: Fax #: Shipping Address: Item Price Quantity Sub total W 4 Forms (for each employee) $23 base, plus $0.45 per employee Employee Attendance Record $23 base, plus $0.45 per employee Automatic Check Signing $85.00 (one time charge) Personalized Checks with Logo $125.00 (one time charge) Check Stuffing $0.24 per envelope Tax Pay Service Individual quote Direct Deposit Individual quote Employee Annual Benefit Statements Custom Reports Individual quote 401K Reports Individual quote Check Reconciliation File (positive pay file) $85.00 base, plus $3.65 per statement Individual quote Payroll Binders $17.00 per binder Time Card Labels Individual quote Blank Payroll Checks $32.00 per 20 checks HR HelpDesk Individual quote Federal & State Labor Law Posters, laminated $49.00 Total $ Questions? Contact your Payroll Specialist at 630.887.3156. Fax completed form to 630.887.0735. 12 P age