Quarter Processing: Closing the Quarter

Transcription

1 Quarter Processing: Closing the Quarter Handout Manual Need support after training? To exchange tips and best practices with fellow users, get on The Bridge an online community built exclusively for ADP clients. V _4NH Copyright ADP, LLC

2 ADP Trademarks The ADP logo and ADP are registered trademarks of ADP, LLC. ADP Workforce Now is a registered trademark of ADP, LLC. The Bridge Sponsored by ADP & Bubble Talk Design is a registered trademark of ADP, LLC. ADP A more human resource. is a service mark of ADP, LLC. All other trademarks and service marks are the property of their respective owners. Copyright ADP, LLC. ADP Proprietary and Confidential All Rights Reserved. These materials may not be reproduced in any format without the express written permission of ADP, LLC. Any repurposing, reposting, or other use of this content (including but not limited to YouTube or any other social media) is expressly prohibited. ADP provides this publication "as is" without warranty of any kind, either express or implied, including, but not limited to, the implied warranties of merchantability or fitness for a particular purpose. ADP is not responsible for any technical inaccuracies or typographical errors which may be contained in this publication. Changes are periodically made to the information herein, and such changes will be incorporated in new editions of this publication. ADP may make improvements and/or changes in the product and/or programs described in this publication at any time without notice. Published by ADP Enterprise Learning February 2017

3 PREFACE Contents Quarter Processing: Closing the Quarter Course Introduction... 5 Course Purpose... 5 Course Objectives... 5 Course Agenda... 5 Follow-Up Items... 6 Adjustment Payrolls... 7 Overview... 7 What Is an Adjustment Payroll?... 7 How to Avoid an Adjustment Payroll... 8 Common Reasons for Adjustment Payrolls... 8 Requesting an Adjustment Payroll on the ADP Support Center Job Aid... 9 Entering an Adjustment Payroll on the ADP Support Center Job Aid Reconciliation Overview What Requires Reconciliation? Reconciling Your Reports Reconciliation Checklists How to Calculate Taxable Wages Practice: Using the Master Control to Calculate Taxable Wages Learning Activity: Calculating Taxable Wages Course Closing Continuing Education Credits Training Evaluation Quarter Processing: Closing the Quarter (34586_4) Copyright ADP, LLC iii V _4NH

4 PREFACE This page is intentionally left blank. Copyright ADP, LLC iv V _4NH

5 Course Introduction Course Purpose This course introduces you to processing adjustment payrolls and reconciling payroll reports with tax reports, providing you with the tools and knowledge necessary to successfully close each quarter. Course Objectives Upon completing this course, you will be able to do the following: Describe the types of adjustment payrolls. Determine how to process an adjustment payroll on the ADP Support Center. Determine how to reconcile payroll reports with quarterly tax reports and quarterly tax reports with annual tax reports. Determine how to calculate taxable wages. Course Agenda This course includes the following topics: Adjustment Payrolls Reconciliation Copyright ADP, LLC 5 V _4NH

6 Follow-Up Items List any follow-up items that you may need to discuss with your client support specialist or implementation specialist: Copyright ADP, LLC 6 V _4NH

7 Adjustment Payrolls Overview In this topic, you will learn about the different types of adjustment payrolls that you can process to ensure your payroll data is included in the proper quarter. What Is an Adjustment Payroll? An adjustment payroll is a payroll that is processed to update or to correct a previous quarter. Types and Descriptions Type Out-of-sequence reclose payroll Out-of-sequence amendment payroll Amendment Description An adjustment payroll that you process between the last payroll of the quarter processing and the out-of-sequence reclose deadline to correct the previous quarter An adjustment payroll that you process between the day after the out-ofsequence reclose deadline and the out-of-sequence amendment deadline to correct the previous quarter An adjustment that you process after the out-of-sequence payroll deadline to correct a quarter that has already closed Penalties for Late Deposits Late deposits can result in the IRS imposing the following penalties: 2% penalty for deposits 1 5 calendar days late 5% penalty for deposits 6 15 calendar days late 10% penalty for deposits 16 or more calendar days late Important Information If you do not use ADP's Tax Filing Service, you can process adjustment payrolls. However, you are responsible for amending and filing corrected returns to the various taxing jurisdictions. Copyright ADP, LLC 7 V _4NH

8 How to Avoid an Adjustment Payroll Before your last payroll of the quarter, make sure you have done the following: Scheduled adequate time to verify your Master Control before ADP processes quarterend reports Included the following: Manual checks Voided checks Bonus pays Address changes Social Security number changes Special compensation options Common Reasons for Adjustment Payrolls Common reasons for processing an adjustment payroll include the following: An employee moved from one state to another state in a previous quarter, but the employee's state coding was not changed until the current quarter. The employee's wages for the previous quarter need to be updated to reflect the correct state coding. Special compensation options such as third-party sick pay and long-term disability were not entered for an employee before or with the last payroll of the year. An employee has negative year-to-date taxable wages. Copyright ADP, LLC 8 V _4NH

9 Requesting an Adjustment Payroll on the ADP Support Center Job Aid To process an adjustment payroll, you must first request the adjustment on the ADP Support Center. Follow these instructions to request an adjustment payroll. Instructions Step Action 1 On the ADP Support Center Home page, click Quarter and Year End Guide. 2 On the Quarter and Year End Guide page, click the appropriate link based on the following criteria. If It Is Six to eight weeks after the close of the quarter More than six to eight weeks after the close of the quarter Then Under Adjustments - Current Quarter, click Access the Out of Sequence Application to Request Adjustments to the Current Quarter. Under Adjustments - Prior Quarter, click Access the Adjustment Special Pay (ASP) Application to Request Adjustments to a Prior Quarter. Result: The Request an Adjustment Payroll Processing page is displayed. Copyright ADP, LLC 9 V _4NH

10 Instructions (cont.) Step Action 3 On the Request an Adjustment Payroll Processing page, click Out of Sequence Payroll to schedule the adjustment payroll. Result: The Authorization Agreement is displayed. 4 To give ADP permission to process the adjustment and to assume the responsibility for all processing fees, click I Agree. Result: The Out of Sequence Payroll Request Form is displayed. Copyright ADP, LLC 10 V _4NH

11 Instructions (cont.) Step Action 5 Review the fees based on the date that you submit the adjustment. 6 Complete the following required fields: In the Ascertained Date field, enter the date on which the need for the adjustment was discovered. In the Reason Code(s) field, select the applicable reason code for the adjustment. Copyright ADP, LLC 11 V _4NH

12 Instructions (cont.) Step Action 7 Enter the adjustment processing dates and details. 8 Select I Agree, and then click Submit. Result: The processing request is displayed with a confirmation number. Copyright ADP, LLC 12 V _4NH

13 Instructions (cont.) Step Action 9 Review the processing request and click Continue. Copyright ADP, LLC 13 V _4NH

14 Entering an Adjustment Payroll on the ADP Support Center Job Aid After you request an adjustment payroll on the ADP Support Center, you need to wait until ADP contacts you before you submit the adjustment. Follow these instructions to enter an adjustment payroll. Instructions Step Action 1 On the Request an Adjustment Payroll Processing page, in the Please Note section, click Click Here. Copyright ADP, LLC 14 V _4NH

15 Instructions (cont.) Step Action 2 In the Adjustment Type field, select the applicable adjustment type. Use the following table as a guide. Adjustment Type Description 1 Regular Select this type to update wages, taxes, group term life insurance, long-term disability, taxable fringe benefits, and so on. 4 Prior Taxables Select this type to adjust prior taxable wages for employees who have more than one file number. 5 Third Party Sick Pay Select this type to update third-party sick pay. Update Employee Info Select this type for employee maintenance updates. Copyright ADP, LLC 15 V _4NH

16 Instructions (cont.) Step Action 3 Enter the adjustment details. Additional Resources You can access short demonstrations (learning bytes) about how to request an out-of-sequence payroll schedule and submit an out-of-sequence payroll on the ADP Support Center by following these steps. Step Action 1 On the ADP Support Center Home page, click Quarter and Year End Guide. 2 On the Quarter and Year End Guide page, click Learning. 3 Click Year-End Learning Bytes. Copyright ADP, LLC 16 V _4NH

17 Reconciliation Overview In this topic, you will learn about the items that require reconciliation and how to compute taxable wages. In addition, you will be provided with quarter-end checklists to help you reconcile each quarter. What Requires Reconciliation? The information that you should reconcile throughout the year includes the following: Current payroll Tax deposits per payroll Quarterly federal tax deposits Unemployment tax deposits Annual Forms W-2 Reconciling Your Reports You should reconcile your payroll reports with your quarterly reports to ensure that the amounts match at the end of each quarter. At the end of the fourth quarter, you should also reconcile the amounts on your quarterly reports with the amounts on your annual reports. Reconciling Payroll Reports with Quarterly Reports Report Master Control Payroll Summary (Statistical Summary) What Amounts Should Match? Quarter-to-date employee amounts for the last payroll of the quarter should match the quarter-to-date amounts on the Wage & Tax Register. Year-to-date employee amounts for the last payroll of the year should match the year-to-date amounts on the fourth-quarter Wage & Tax Register. The sum of all of the payrolls' federal tax deposit amounts for each quarter should match the amounts on the quarterly Statements of Deposits & Filings and on Form 941. The sum of all of the payrolls' federal, state, and local tax and taxable amounts for each quarter should match the amounts on the Company Totals page of the Wage & Tax Register and on the quarterly Statement of Deposits & Filings. The sum of all of the payrolls' state unemployment amounts for each quarter should match the amounts on the Company Totals page of the Wage & Tax Register and on the Quarterly Wage Report. Copyright ADP, LLC 17 V _4NH

18 Reconciling Quarterly Reports with Annual Reports Report Wage & Tax Register What Amounts Should Match? Year-to-date employee amounts from the fourth quarter should match the amounts on Form W-2. The fourth-quarter, year-to-date amounts on the Company Totals page should match the amounts on the annual Statement of Deposits & Filings, Form 940, and Form W-3. Copyright ADP, LLC 18 V _4NH

19 Reconciliation Checklists Payroll Checklist Item Have I Verified That 1 The Master Control company totals match the cycle totals? 2 The pay date and period-ending dates are correct? 3 All employees have a valid Social Security number? 4 No employee indicates Applied For in the Social Security Number field? 5 All manual and voided payroll checks were entered in a payroll? 6 Third-party sick pay information has been entered? 7 All employees have positive wages (except for other compensation) on the Master Control? 8 All employees' quarter-to-date wages are less than or equal to the year-to-date wages on the Master Control? 9 ADP has been notified of any tax notices/tracers (only if you use Tax Filing Service)? 10 Special compensation option accumulators are displayed on the Master Control? Quarter-End Checklist Item Have I 1 Verified the Quarterly Tax Verification Letter? 2 Notified ADP of any new tax jurisdiction information? 3 Verified that the quarter-closing dates that ADP has on file are accurate? 4 Reviewed the Error Notification System to verify the accuracy of the payroll records? Note: To access this tool, on the ADP Support Center, select Payroll > Reports > Error Notification System. 5 Entered all adjustments before the processing of the last payroll of the quarter? 6 Requested a Tax Report Hold to delay the printing of quarterly reports (if necessary)? Note: To request a Tax Report Hold, access the ADP Support Center and select Quarter and Year End Guide > Tax Report > Tax Report Hold (Variable Hold Add). Credit Condition Checklist Item Have I 1 Reviewed the quarterly tax reports upon receipt? 2 Determined whether credit pages exist? 3 Identified the type of credit? 4 Identified which employees are affected? 5 Determined the cause of the credit situation? 6 Identified which reports are affected? 7 Contacted my ADP service team to discuss available options? Copyright ADP, LLC 19 V _4NH

20 How to Calculate Taxable Wages Federal Taxable Wages, Tips, and Other Compensation Gross earnings (includes taxable fringe benefits and tips) Federal tax-exempt wages Deferred compensation Meals Cafeteria 125 benefits (may vary based on the benefit) + Group term life insurance (cost of coverage more than $50,000) + Third-party sick pay + Other compensation = Wages, tips, and other compensation Social Security Taxable Wages Gross earnings (includes taxable fringe benefits and tips) Social Security exempt wages Meals Cafeteria 125 benefits (may vary based on the benefit) + Group term life insurance (cost of coverage more than $50,000) + Third-party sick pay = Social Security wages Medicare Taxable Wages Gross earnings (includes taxable fringe benefits and tips) Medicare exempt wages Meals Cafeteria 125 benefits (may vary based on the benefit) + Group term life insurance (cost of coverage more than $50,000) + Third-party sick pay = Medicare wages Copyright ADP, LLC 20 V _4NH

21 Practice: Using the Master Control to Calculate Taxable Wages Instructions Use the sample Master Control to answer the following questions about Frederick Parks s taxable wages. Questions 1. Which types of special compensation options does Frederick have that impact his federal taxable wages? 2. Is 401(k) subtracted from or added to his gross pay? 3. Is group term life subtracted from or added to his gross pay? Copyright ADP, LLC 21 V _4NH

22 Learning Activity: Calculating Taxable Wages Instructions Calculate the taxable wages for each scenario using the steps in the How to Calculate Taxable Wages section of your handout manual. Scenario 1 Calculate the federal, Social Security, and Medicare wages for John Smith using the following year-to-date figures: Gross earnings: $10, Other CAFE 125: $ (k): $ Federal taxable wages = Social Security taxable wages = Medicare taxable wages = Scenario 2 Calculate the federal, Social Security, and Medicare wages for Mary White using the following year-to-date figures: Gross earnings: $29, Other CAFE 125: $ (k): $1, GTL premiums (more than $50,000): $32.00 Third-party sick pay: $ Federal taxable wages = Social Security taxable wages = Medicare taxable wages = Copyright ADP, LLC 22 V _4NH

23 Course Closing Continuing Education Credits ADP is an approved provider of recertification credit hours (RCHs) by the American Payroll Association (APA) and continuing professional education (CPE) credits by the National Association of State Boards of Accountancy (NASBA). Most ADP courses are eligible for RCHs and CPE credits. RCHs and CPE credits provide recognition for updating or broadening professional competencies and may be used to maintain certifications such as the Certified Payroll Professional (CPP), Certified Public Accountant (CPA), or the Society for Human Resource Management (SHRM). Professional organizations establish their own certification procedures, which are subject to change. Professional organizations often require documentation of class objectives, agenda, and duration, along with a certificate of completion. This information is provided at the end of your handout manual. At your request, your instructor will provide you with a certificate of completion at the end of this class. Copyright ADP, LLC 23 V _4NH

24 Training Evaluation Please take a moment to complete the evaluation. Copyright ADP, LLC 24 V _4NH

25 ADP Course Description Quarter Processing: Closing the Quarter (34586_4) Program Content This course prepares participants to successfully close each quarter. Topics include adjustment payrolls and reconciliation. Objectives Upon completing this session, participants will be prepared to do the following: Audience Describe the types of adjustment payrolls. Determine how to process an adjustment payroll on the ADP Support Center. Determine how to reconcile payroll reports with quarterly tax reports and quarterly tax reports with annual tax reports. Determine how to calculate taxable wages. This course is intended for those participants who are responsible for reconciling payroll each quarter. Prerequisites None Advance Preparation None Participant Materials Participants will need to download or print the Quarter Processing: Closing the Quarter handout manual before attending class. Method of Presentation Virtual class (VC), Group Internet Based Duration 1 hour Continuing Education Credits This course may be eligible for the following recertification credit hours (RCHs) and continuing professional education (CPE) credits: RCH: 1.0 CPE: 1.0

26 Note: ADP is unable to grant formal RCH and CPE credits to a participant logged on to class through a mobile device. For more information, see the Training Policy. In accordance with the standards of the National Registry of CPE Sponsors, CPE credits have been granted on a 50-minute hour. ADP, LLC, Employer Services, is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: In accordance with the American Payroll Association (APA), recertification credit hours (RCHs) apply to Certified Payroll Professional (CPP) and Fundamental Payroll Certification (FPC) credentials. Recommended Field of Study (NASBA) Specialized Knowledge and Applications Cost and Training Policy For information about course cost, registration, and cancellation policies, refer to the Training Policy. Learning Records and Privacy Policy Learner records are available on Learn@ADP within 24 hours after participants complete their training classes. To access learner records, refer to these instructions. View ADP's Privacy Policy on Learn@ADP. V _4VCNH Copyright ADP, LLC