2017 Year-End Guide. As always, we thank you for your continued business and wish you the very best this holiday season.

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1 2017 Year-End Guide 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. As always, we thank you for your continued business and wish you the very best this holiday season. Dominion Payroll dominionpayroll.com

2 Dear Friends of Dominion Payroll, It is that time of year again year-end is upon us! This document is a crucial part of our fourth quarter and year-end education process and will help guide you smoothly through a successful end of the year. Please read this document carefully and respond to us with any adjustments and notifications as soon as possible. As always, if you have questions that are not addressed in these documents or need further clarification, you may contact our service team at: customerservice@dominionpayroll.com Thank you, The Dominion Payroll Team Table of Contents Important Deadlines and Holidays 3 W-2 and 1099 Deadlines 3 How to Review Employee Information, ACA Miscellaneous Forms 4 ACA Reporting 5 Bonus/Holiday Checks 6 Dos and Don ts 7 Health Care Reporting on W-2 8 IRS Notes for 2017, Payroll Schedule 8 State Unemployment Rate Updates 8

3 Important Deadlines for Year-End November 20 Notify DP as to which types of Fringe Benefits you will be reporting at Year End December 15 Review year-end guide, audit employee records to prepare for W-2s December 27 Last day to process 2017 payrolls January 26 W-2 s and 1099 s delivered to clients no later than this date. Upcoming Holidays November 23 Thanksgiving; DP and banks are closed. December 22 DP hopes to close at noon. December 25 Christmas Day; DP and banks are closed. January 1 New Year s Day; DP and banks are closed. January 15 Martin Luther King, Jr. Federal Holiday; DP and banks are closed. Important Addresses Customer Service customerservice@dominionpayroll.com Tax tax@dominionpayroll.com Benefits benefits@dominionpayroll.com Year-End Adjustment Processing Deadline Please notify us no later than December 15, 2017 of any year-end payroll adjustments. This will provide sufficient time to record adjustments prior to your last payroll process of We understand that some information related to closing your 2017 payroll records may not be available by this date, and we will make arrangements to report information as it becomes available. Please keep in mind that reporting adjustments after your last payroll in 2017 could delay your 4th quarter and year-end returns as well as causing additional processing fees. Examples of adjustments are as follows: Void and/or manual checks Third party sick payments Fringe benefits Year-end distributions Bonuses and other gifts given to employees Heath Insurance Premiums (only for employers with 250 or more W-2s filed in 2016, due by Jan. 12, 2018) Vendor 1099 payment recording W-2 and 1099 Deadlines W-2 deliveries will begin Monday, January 8th. W-2 s will be shipped to your offices no later than January 26th. The forms will be in a separate package labeled W-2. If you are a paperless client, we will deliver paper W-2 s to your delivery address on file. 3

How to review and confirm accuracy of your company and employees information On the first payroll in your Year End Period, a SSN Verification Report and a Tax ID & Rate Report will be included with

4 How to review and confirm accuracy of your company and employees information On the first payroll in your Year End Period, a SSN Verification Report and a Tax ID & Rate Report will be included with your payroll reports. Please review this report to ensure that all of the Tax IDs for your employee and employer tax accounts are correct prior to running your last 2017 payroll. Employee W2 Information Directions: 1. Log into isolved. 2. Select Client Reports in the Reporting module. 3. Select Employee W2 Verification and/or Employee W2 Preview. 4. Hit the Run Report button. 5. Review the reports and make any updates in isolved prior to processing your final payroll of Electronic W2 option Employees who log into ESS have the option to accept digital W2s. Employees need to login and hit I Accept before the last payroll of the year in order to take advantage of this option, otherwise they will receive a paper W2. PLEASE NOTE: To opt-out of receiving a paper W2 this year, employees must login and accept before the last payroll of 2017 is processed Miscellaneous Forms If you have paid 1099 miscellaneous income through the payroll system in 2017, DP 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 for 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. 4

5 ACA Reporting If you have at least 50 full-time employees (including full-time equivalent employees), you are considered an Applicable Large Employer (ALE) according to the Affordable Care Act (ACA) and must offer full-time employees ACA compliant health care coverage or pay a penalty. You will need to report information to the IRS about the health care coverage offered to your full-time employees using Forms 1094 and You must also distribute copies of Form 1095 to your full-time employees, which contains information they may need to report as part of their income tax submission for the 2017 tax year. In order to meet the 2018 reporting, employers should already be compiling and analyzing data now to determine coverage and affordability. Important Deadlines for Reporting Employers: You will need to approve Forms 1095 for 2017 in isolved no later than January 12, Employee 1095: isolved will send all 1095s to the primary address of your company. You will be responsible for handing out or postmarking the forms for mailing no later than January 31, 2018 for the previous calendar year of For ACA Compliance service clients - ACA Forms Approval is required: 1. Log into isolved. 2. Select Client Management > ACA Forms Approval (or ACA on search menu to navigate to ACA Forms approval) 3. Click Preview Report and Preview Forms - review for accuracy 4. Once you have completed review - Click Approve Forms - which will commit the forms for year end batch printing. If you are not currently using the ACA Compliance service and are unsure if you need to comply with ACA you can use the ACA Large Employee Compliance test report: 1. Log into isolved. 2. Select Reporting > ACA Large Employee Compliance Test 3. Enter prior calendar year dates (From : 1/1/2016 To Date 12/31/2016 to generate report) contact: benefits@dominionpayroll.com to request the ACA compliance service to be setup. Additional Resources 5

6 Special Payrolls Many companies issue bonus checks and other supplemental wage payments in December, and these checks/adjustments can be run with regular payroll. If a separate payroll check date or period end date is desired, the extra checks must be run as a Special payroll that is added to the payroll schedule. Please keep in mind that the default check types that will be included are different for Regular Payrolls and Special Payrolls: Default System Settings for Paid Items on isolved Payrolls Regular Payroll Special Payroll Salaries x Auto-Paid Hourly Employees x Additional Checks/Manual Checks x x Entries from Time Entry Grid x Entries from Additional Time Entry Grid x x Bonus/Holiday Checks Checklist How will you enter the bonus pays? Hand-keyed Spreadsheet import Other How are you scheduling the bonus payroll? Combined with normal pay Separate checks on a normal pay run Separate payroll with same check date Separate payroll with different check date How will the employees be paid their bonuses? Cash Live Checks Direct deposit Who will cover the taxes on the bonuses? Employee (start with gross pay, calculate net) Employer (start with net pay, calculate gross) What deductions will you take from the bonuses? Social Security taxes only All taxes All taxes + retirement plan deductions Other When should employees see the electronic stubs for the bonuses? When payroll runs On check date Other 6

7 DOS AND DON TS Topic Do Don t Void Checks Do void fourth quarter checks on or Do not void prior quarter checks. Send before your last payroll process for a note to the customer service team to let them know about prior quarter checks to be voided. Manual Checks Address Changes Payroll Calendar Verification 1099 master file information 1099 Information Payroll Tax Information Group Term Life (GTL) Third Party Sick Pay Fringe Benefits Do enter them on or before your last payroll process for Do make all address changes on or before your last payroll process for Do verify payroll processing schedule/calendar by 01/12/2018. Review the following reports from Client Reports: Employee W-2 Verification Report SSN Verification Report Tax ID & Rate Verification Report ACA Reports Year-End Exceptions Report Internet customers enter online/ non-internet clients submit to customer service before you process the last payroll of Internet customers enter online/ non-internet clients submit 1099 earnings to customer service before you do the last process of Do send all payroll tax documents received from federal, state and/or local tax authorities to the Tax Department. Do enter on or before your last payroll process for Send all 3rd Party Sick Pay to customer service with or before your last payroll process of Do report any additional fringe items on or before your last payroll process for Do not enter negative manuals for prior quarters without consulting a DP service representative. Do not enter GTL on terminated employees. Call DP for instructions. Do not enter manual adjustments after the last 2017 payroll process. Send them to customer service. 7

8 Health Care Reporting on W-2 Requirement for Large Employers If your company filed more than 250 W-2 s in 2016, the ACA W-2 reporting requirement applies, and you are responsible for reporting the total costs (regardless of employee-paid portion vs. employer-paid portion) of health insurance on their 2017 W-2 s. Typical costs to include are those paid on behalf of the employees for group health insurance plans. For more detailed explanation of these items, please refer to the IRS website [1]. Since this information may not be available until after the close of the 2017 calendar year, we ask that you compile a list of the employees and their premiums in January of 2018 and send us the spreadsheet by January 12th so that we can add those values to your W-2s. IRS Notes for 2018 FICA Social Security is projected to remain at 6.2%. Medicare tax rate steady in 2018 at 1.45 % up to $200,000. For wages over $200,000, an additional 0.9% applies to the employee portion only, making the percentage 2.35% for wages over $200,000. This 0.9% increase only applies to the employee Medicare portion of the Federal Insurance Contributions Act (FICA) tax. Consequently, employers do not have to match the increased Medicare tax amount from employee s wages. NOTE: The employer is required to withhold the increased amount from all workers with wages exceeding $200,000, regardless of the marital status claimed on the employee s Form W-4. Over- and under-withholding for the employee will be reconciled upon the filing of his/her tax return. Social Security Tax Wage Base: In 2017 the maximum is $127,200. In 2018, projected to increase to $128, k contribution limits: $18,500 with catch-up of $6,000 for employees age 50+. Simple IRA contribution limits: $12,500 with catch-up of $3,000 for employees age 50+. State Unemployment Rate and Deposit Frequency Notices for 2018 You should receive your 2018 state unemployment rate and your state deposit frequency during the next two months. Once you receive these notices, please fax them to us at or them to the Tax Department (tax@dominionpayroll.com). This will ensure the accuracy of your tax liability calculation and timely deposits of the associated taxes. Payroll Schedules for 2018 Please take a few moments to review your 2018 schedule during the first week of the new year. Internet clients (using isolved): 1. Log into isolved. 2. Select Payroll Processing. 3. Select Client Run Schedule. 4. Review the schedule to ensure that the appropriate dates are there for each check run.* *If you have a fiscal year start, please ensure that the appropriate First Payroll in Fiscal Year box is checked on the schedule. 8 [1]

9 dominionpayroll.com 2018 January April February May March June July October Federal Bank Holiday DP offices closed August November September December Talent Acquisition Time & Attendance Payroll Services Human Resources Benefits Admin Virginia North Carolina Texas Mississippi Florida Tennessee Toll Free: 877.DPS.PAYU, fax: , customerservice@dominionpayroll.com

Year End. Guide. At Your Service

Year End. Guide. At Your Service Year End 2017 Guide 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