Article written by Sandi Frank, Manager of Client Solution Services
There is nothing normal about this year…face masks, social distancing, a run on essential cleaning supplies! We are more conscious of protecting each other and still trying to adjust to the new state of the world. Payroll professionals can adapt to changing environments. There is usually something new to learn every year. Change is inevitable. One thing that has not changed in this unusual year is that workers still need their paychecks and need to file their taxes.
Payroll professionals tend to be most comfortable when things are black and white, and easily explained with reliable answers. That is not happening in our world this year.
There has been a lot of change in the payroll world this year with the new credits, new and revised forms, mid-year tax credits and deferrals; the list goes on and on.
The COVID-19 pandemic has created a multitude of changes that we must adopt quickly. We must also be able to pivot with little to no notice or warning. Let’s take a look at a few of these topics.
2020 Year End Challenges
- The 2020 IRS Form 941 was significantly revised to account for COVID-19 tax credits. It has been revised multiple times this year to allow reporting of new employment tax credits and other tax relief. Additionally, there are three versions of the 941 depending on which quarter you are reporting.
- A presidential memorandum allowing deferral of employee social security tax from September 1st through December 31st , 2020, creating uncertainty about implementation of the deferral and recovery of the deferred taxes.
- The FFCRA (Families First Coronavirus Response Act) requiring private employers with fewer than 500 employees and all government employers to provide 80 hours of paid sick leave to their full time employees and pro-rated for part time employees for certain COVID- 19 related reasons.
- The CARES Act which provides a refundable tax credit against certain employment taxes equal to 50% of up to $10k in qualified wages per employee.
- The new IRS Form 7200 will be used to claim advance COVID-19 tax credits.
IRS allows mid-year changes to Section 125 cafeteria plans, including employer- sponsored health coverage, health FSAs, and dependent care assistance programs, during the 2020 calendar year. Note – the claims period was extended as well!
As I mentioned, this is not an exhaustive list and I suspect there may be more changes before the W-2’s are produced, and taxes are reported. As a member of the American Payroll Association Government Relations Task Force, I can tell you that there are some very smart people working with the government agencies to understand the changes and propose reasonable expectations that can be implemented by our payroll heroes!
Bottom line, the 2020 year-end process is going to be one of the most difficult in many years. It is going to take a village and we are going to need to lean on each other to ensure we are doing things accurately and compliantly.
Are you ready for 2020 Year-End?
- Do you understand all the new requirements?
- Are you confident with all upcoming compliance concerns?
- Do you have the extra time? Can you fit it in your already demanding schedule?
- Have you balanced your year to date withholdings and taxes?
- Do you have new personnel, increased processing, or other unique challenges?
- Have you recently implemented a new system?
- Do you know what to audit or how?
- Have you had a recent Merger & Acquisition?
- Are you being audited?
How Can PayTech Help?
PayTech is Ready to Plan, Prepare and Execute Your Year-End
Our seasoned payroll professionals have mastered the art of year-end processing and stay current on the changing requirements. We know the regulations, processes, and systems required to make you successful. Our experts will work side-by-side with you to prepare for year-end – it’s what we do!
Here are just a few of the ways PayTech can help you:
- Provide support navigating the changes due to the COVID-19 pandemic that affect payroll departments
- Assist our clients to ensure their system and processes are setup to accurately report wages, taxes, and benefits to the IRS, SSA, and all regulatory authorities
- Utilize best practices to build, calculate and reconcile tax and W-2
- Facilitate internal communication needed for W-2 processing
- Educate and train your staff to support your unique requirements
- Create a year-end checklist and training document to ensure success
- Provide support to make sure these activities are completed timely and accurately
We Can Help!
We help eliminate stress and give you peace of mind that year-end is accurate and compliant so you can enjoy the holidays and spend time with your family!
