2013 Year End Customer Guide

Transcription

1 November 2013 Wells Fargo Business Payroll Services 2013 Year End Customer Guide 2013 Wells Fargo Bank N.A. All rights reserved. Member FDIC.

2 Welcome to the 2013 year-end customer guide The 2013 year-end customer guide will help you complete your 2013 payroll processing needs and prepare for This guide will make it easy for you to meet the 2013 payroll deadlines, avoid payroll adjustments and corrections. This guide provides information on: Additional resources Preparing for year-end processing, including validating social security numbers and accuracy of additional payroll, company and employee information Detailed information on Form W-2 and Form 940 What you need to know for 2014 We appreciate your attention to detail and thank you for allowing Business Payroll Services to assist you with your payroll needs. This presentation is provided for informational purposes only. Wells Fargo Bank, N.A., is not responsible for the content or information provided by non-affiliated third parties. Please consult with your legal, financial, employment and/or tax advisors as needed. Revised November 2013

3 Table of Contents Contact and Resource Information... 2 IRS... 2 Social Security Administration... 2 State Specific Information... 2 BPS Resources... 2 Online Training... 2 HR Prepare for Year End Processing... 3 Year End Calendar and Processing Dates... 5 Year End Fees... 6 What to Know... 7 Record a Manual Check... 7 Create a Bonus Check... 7 Report 3 rd Party Sick Pay % Shareholder... 8 Tips and Reporting... 8 Group Term Life Contractors... 8 Form W Form Preparing for November

4 Contact and Resource Information For further information from government agencies and Business Payroll Service contact or access one of the available resources. IRS Forms and Publications TAX-FORM (800) IRS Contact Information (800) Social Security Contact Information (800) State and Local Links Wells Fargo Business Payroll Services Customer Service Phone: (888) The best time to call the customer service center, during year-end (December 2, 2013 January 31, 2014) is between 7:00am-9:00am CST. HR 360 Easily access forms, posters and HR assistance to keep up to date with laws for small businesses. For BPS customers who have purchased the HR 360 product. November

5 Prepare for year-end processing Utilize the following tips and information to prepare for an efficient year-end for you and your employees. Incorrect company or employee information may cause errors and delay your yearend processing resulting in penalties and additional fees. Review the following information for accuracy: Employee name (verify accurate spelling) Current address Wages (note wages are thru current payroll only) NOTE: To avoid errors on your employees W-2s resulting in reruns and processing W-2cs it is important to verify employee information prior to the processing of your W-2s. Company information: Verify company name and address NOTE: The company name and address that appears on the W-2 is required to be the legal name as recorded with the IRS. Verify company tax information. By verifying your company tax ID number(s) have been received by BPS and are accurate you will avoid possible amendments and penalties from the tax ID agencies. Federal tax ID State tax ID(s) State unemployment compensation ID(s) and rates Local tax ID(s) and rates NOTE: If you are missing a State or Local tax ID you may be subject to a $45 Missing Tax ID assessment per month by BPS in addition to penalties & interest should the tax filings and deposits be rejected by the agency. Social Security numbers Verify accurate social security numbers If there is an error with social security numbers: Employees will not receive credit for wages with the Social Security Administration Employees may have issues when filing their personal tax returns A W-2c will have to be processed potentially resulting in additional fees and penalties Contractor 1099s 1099s will only be issued to contractors who have been paid through the BPS payroll system in the year November

6 Prepare for year-end processing Utilize the following tips and information to prepare for an efficient year-end for you and your employees. Incorrect company or employee information may cause errors and delay your yearend processing resulting in penalties and additional fees. If applicable, verify that withholding and reporting have been processed accurately for the following items: Group-term life insurance in excess of $50,000 Third-party sick pay (if administrator is not issuing a W-2 for these wages) Personal use of a company vehicle Non-qualified moving expense reimbursements Company provided transportation or parking Non-cash payments Tips or tip allocation 2% Shareholder Any additional fringe benefits If your tax liability will be over $100,000 for a single check date, contact us at NOTE: In order for W-2s to be accurate this information must be reported by December 30, Upon receipt from the state, fax your 2014 unemployment insurance tax rate to Wells Fargo Business Payroll Services at FUTA Credit Reduction If you are an employer in a state subject to FUTA Credit Reduction you will have additional FUTA liabilities due for This information is available in your year-end packaged received in January, Accounts will be debited on January 22, 2014 for FUTA tax. Employer Provided Health Coverage Nontaxable: The Affordable Care Act requires employers to report the total cost of the health premium made to the insurance agency under an employer sponsored group health plan. This includes employee and employer payments. Filing is optional for employers filing fewer than 250 W-2 forms in NOTE: Any adjustments not submitted by Monday, December 30, 2013 may result in fees (see yearend fee schedule) and penalties in order to process amended returns. November

7 Year-end calendar and processing dates The following calendar provides the important payroll dates to complete year-end tasks, holiday hours for BPS and the year-end package delivery date in Key Payroll Dates: Friday, December 20, 2013 Ensure that all voided and manual checks have been processed in the payroll system Friday, December 20, 2013 All additional bonus runs should be scheduled Friday, December 20, 2013 Verify all prior 2013 bonuses paid have been processed in the payroll system Monday, December 30, 2013 To avoid possible penalties and interest, final payrolls or adjustments to 2013 wages must be processed NOTE: Additional fees will apply to any adjustments made after Monday, December 30, Business Payroll Services will be closed on the following days: Thursday, November 28, 2013 Wednesday, December 25, 2013 Wednesday, January 1, 2014 Business Payroll Services will be closed early on the following days: 5:00 p.m. Friday, November 29, :00 p.m. Tuesday, December 24, :00 p.m. Tuesday, December 31, 2013 Important Delivery Date: All year end packages will be delivered by Monday, January 20 th, 2014 November

8 Year-end fees The following fees apply to W-2s, 1099s, reprints and amendments. W-2s & 1099 o $42.50 flat fee o $4.50 per active and termed employee/contractor W-2 & 1099 reprints complete o $42.50 flat fee o $4.50 per number of active and termed employee/contractor o $12.95 delivery W-2 & 1099 reprints individual o $5 per reprint o $12.95 delivery W-2s & 1099 corrected o $15 per correction o $12.95 delivery Amended tax returns o $250 per quarter up to 5 returns o $500 per quarter greater than 5 returns o $100 Social Security corrections o Plus the cost of the adjusted payroll if applicable November

9 What to know It is important for all necessary earnings and deductions to be added prior to yearend to ensure accurate processing and data being reported on W-2s and 1099s. To avoid penalties and fees all 2013 wages must be reported by the last payroll of Recording a Manual Check Employers need to validate that all earnings have been reported, if not these earning must be reported to BPS All manual checks must be processed on or before the last payroll of 2013 Creating a Bonus Check Before processing a bonus payroll, be prepared to answer the following questions: Will the bonus payroll be issued via a live check or direct deposit? Should voluntary deductions be taken out of the bonus payroll (such as loans, 401(k) deductions, etc.)? Are changes needed to the tax amount withheld from the bonus check (such as federal or state income tax)? Bonus payrolls with a 2013 check date will be included in 2013 wages and reflected on all fourth quarter 2013 tax reports and W-2s. If you need to report a 2013 bonus payroll on or after December 31, 2013 (with a check date of 2013) you may incur penalties and interest. If your federal tax liabilities for the bonus payroll are over $100,000.00, then the taxes must be deposited the business day after the check date. If you require assistance regarding taxation for a bonus payroll, please contact your CPA. Third-Party Sick Pay Federal legislation requires the reporting of both taxable and non-taxable sick pay made to employees from a third party. Taxes withheld on those payments must also be reported. Sick pay should be included on either the employees W-2s or on a separate form provided by the third party. If third party sick pay is not reported by the third party, it must be included on your employees W-2s. It is important that you obtain this information from the appropriate third party provider as soon as possible. These entries must be processed on or before your last 2013 payroll to ensure that your Form 941 and W-2 reports are accurate. If any of your employees have received temporary disability payments in 2013 from a third party carrier, the amount of these payments must be submitted as soon as they are reported to you. Any adjustments submitted after your W-2s are processed could result in additional processing and amendment fees. November

10 What to know It is important for all necessary earnings and deductions to be added prior to yearend to ensure accurate processing and data being reported on W-2s and 1099s. To avoid penalties and fees all 2013 wages must be reported by the last payroll of % Shareholder Special fringe benefit rules apply to S corporation shareholders who owned more than 2% of the corporation s outstanding stock on any day during the tax year, considering both direct and constructive ownership. Current IRS regulations indicate that amounts paid by an S corporation for accident and health insurance covering a 2% shareholder-employee (including dependent coverage) must be reported as wages on the Form W-2. While these wages are subject to federal and state income tax withholding, they are not wages for social security and Medicare tax purposes. NOTE: These amounts should be included by the last payroll of Tips and Reporting Validate all tips and tips allocations have been reported accurately for 2013 Group-term Life Employee earnings records need to be adjusted to reflect group term life insurance benefits in excess of $50,000 provided to any employee. NOTE: These amounts need to be included by the last payroll of Contractors Be sure to verify all wages have been reported for 1099 contractors to ensure accurate data processed for the 2013 form 1099-misc November

11 Form W-2 The Form w-2 shows taxable wages and taxes withheld for each employee. Form W-2 Form W-2 Box Descriptions Box 1 Wages, tips and other compensation Box 11 Nonqualified plans Box 2 Federal income tax withheld Box 12 Refer to Box 12 section for details Box 3 Social security wages Box 13 Status check boxes Box 4 Social security tax withheld Box 14 Other Box 5 Medicare wages and tips Box 15 Employer s state tax ID Box 6 Medicare tax withheld Box 16 State wages, tips, etc. Box 7 Social security tips Box 17 State income tax Box 8 Allocated tips Box 18 Local wages, tips, etc. Box 9 Not used Box 19 Local income tax Box 10 Dependent care benefits Box 20 Locality name November

12 Form W-2 Box 12: Codes Code A Code B Uncollected Social Security tax on tips Uncollected Medicare tax on tips Code C The cost of group-term life insurance over $50,000 Code D The employee s contributions to a 401kplan Code J Non-taxable sick pay (not included in boxes 1,3 or 5) Code P Code V Code W Code Y Code Z Code AA Code DD Excludable moving expense reimbursements Income from exercise of nan-statutory stock options Contributions to a Health Savings Account (HSA), employer and employee combined Deferrals under section 409A nonqualified deferred compensation plan Income under section 409A on a nonqualified deferred compensation plan After tax contributions to a Roth 401K plan Reports the cost of health insurance provided through your employer (nontaxable) Box 13: Retirement Plan Checkbox Decision Chart Type of Plan Conditions Check Retirement Plan Box? Defined benefit plan (for example, a traditional pension plan) Defined contribution plan (for example; a 401k, 403b but not a 457 plan) Defined contribution plan (for example; a 401k 403b, Roth 401k, Roth 403b but not a 457 plan.) Defined contribution plan (for example; a 401k 403b, Roth 401k, Roth 403b but not a 457 plan.) Defined contribution plan (for example; a 401k 403b, Roth 401k, Roth 403b but not a 457 plan.) Profit sharing plan Employee qualifies for employer funding into the plan, due to age/years of service even though the employee may not be vested or ever collect benefits. Employee is eligible to contribute but does not elect to contribute any money in this tax year. Employee is eligible to contribute and elects to contribute any money in this tax year. Employee is eligible to contribute but does not elect to contribute any money in this tax year, but employer does contribute funds. Employee contributed in past years but not during the current tax year under report. Plan includes a grace period after the close of the plan year when profit sharing can be added to the participant s account. Yes No Yes No No (even if the account grows due to gains in the investments) Yes Box 14: Other You may use this box for any other information that you want to give to your employee. Any requests for Box 14 reporting must be set up prior to the final payroll of November

13 Form 940 The Form 940 is the employer s annual FUTA return. It reports unemployment wages and taxes paid during the tax year. Line 11 If you are an employer in a state subject to FUTA Credit Reduction you may have additional FUTA liabilities due for This amount can be found on line 11 on the Form 940. NOTE: Accounts will be debited on January 22, 2014 for FUTA taxes. November

14 Preparing for 2014 Follow the year-begin checklist with help ensure a successful new year. The first payroll of 2014 is the perfect time to make updates to your payroll information. Minimum wages in several states and localities are changing effective January 1 st, NOTE: Your payroll system does not automatically update these rates Advise your account manager of any rate increases and qualified hours paid at both old and new rates of pay Fax your 2014 State unemployment insurance tax rate to your account manager upon receipt. HSA/FSA 2013 deductions should be stopped or changes to reflect the 2014 employee contributions. NOTE: These deductions do not automatically stop Remind your employees to complete a new Form W-4 if their exemption status has changed. Ensure that any employee blocked taxes have been removed if not desired for the New Year. Review your payroll process calendar and make any necessary adjustments with your account manager. Employer Provided Health Coverage Nontaxable: The Affordable Care Act requires employers to report the total cost of the health premium made to the insurance agency under an employer sponsored group health plan. This includes employee and employer payments. Filing is optional for employers filing fewer than 250 W-2 forms in November