Critical Year-End RemindersPlease review the following year-end reminders and "best practices.” Incorporating these items into your year-end planning process prior to your last payroll of 2011 will help ensure a successful year-end. As always, please contact us at (800) 586-0549 or submit a Support Ticket if you have any questions.
Employee Reminder: Request that all employees verify the accuracy of their name, address, and SSN on their pay stubs. Any changes must be made prior to December 31, 2011.
W-2 Review: Run a W2 Edit Report (report ID MPI_4402) and review it for incomplete addresses and/or missing SSNs. The SSA website, www.socialsecurity.gov/employer, has additional helpful information on verifying employee’s SSNs. Year-End Adjustments: All adjustments for wages paid in 2011 must be processed prior to December 31, 2011. Any adjustment or bonus information received after that date will be treated as wages for 2012. Please notify your third party vendor of the December 31st deadline.
Tax Forms: Send all preprinted Federal, state, and local withholding and/or unemployment forms, including 2012 unemployment rate notices, to the Tax Department. We will verify that the correct tax rates, frequencies, and account numbers are being used to deposit and file your payroll taxes for 2012. The Social Security wage limit for 2012 is $110,100 and the employee and employer rate is scheduled to be 6.2%.
Negative Wages: Run a Year-To-Date Report and review it for negative wages. Verify that deductions are correctly applied to the applicable taxable wage categories, i.e., 401(k) should not be included in Federal wages, but should be included in Social Security and Medicare wages.
WHEN YOU RECEIVE YOUR W-2s:
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Review all W-2 forms for accuracy. Some common misunderstandings are that SS Wages do not include tips, the Retirement Plan box is not checked for contributions made to non-qualified or section 457 plans, the Third Party Sick Pay box does not need to be checked because QTS is not the third party that made payments to the employee, and if the employee address is incorrect and all other information is correct, no correction to the form is required.
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Employer copies (copy D) need to be filed in a safe and accessible place according to IRS record retention requirements.
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Employee Copies (B, C, and 2) must be distributed to employees either in person or by mail no later than midnight January 31, 2012.
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W-2 Deduction Mapping: Only government required information is printed on W-2s. However, you need to verify that all of your company deductions are properly mapped to the appropriate W-2 boxes. Box 12 has multiple codes per the IRS Reference Guide on page two. Additional information on W-2 box assignments can be found on the IRS web site; www.irs.gov.
Health Care Reform Update: Deferred for 2011. Employers with 250 or more employees will be required to report Health Care Benefits on the 2012 W-2. Health care benefits will not be taxable income for employees. Watch for future QTS updates regarding this requirement.
Contact: Linda Hovasse (linda.hovasse@qtspayroll.com)
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