Simplify Your Year-end

by | Nov 1, 2021

Article written by Barbara Hinshaw, PayTech Senior Payroll Consultant
Many of you are likely familiar with the acronym and KISS principle, “Keep It Simple and Straightforward.”  Whoever came up with this principle certainly had never experienced year-end in a payroll department!
Is anything simple anymore?  This is a world where we can choose from 10 different creamers at our local coffee shop; why should year-end be any different?   Speaking of coffee, many payroll professionals will find themselves drinking lots of it as they come in early and work through the night trying to fulfill their year-end tax obligations.

We thought we had seen it all in 2020, but 2021 has its own unique challenges.  Here are a few examples:

  • ARPA provides COBRA premium assistance for certain assistance-eligible individuals as well as extending the Employee Retention Credit to eligible employers. ARPA also extended and amended Covid related credit for qualified sick and family leave wages.
  • Repayment of Employee Social Security Tax Deferrals.
  • Repayment of at least 50% of the Employer’s share of Deferred Social Security Tax by December 31, 2021.
  • Pro-tip: Take a look at any acquisitions that may have Deferred Social Security Tax
  • 941 Revisions continued:
  • In March 2021, the IRS released a revised version of Form 941 to be used for the first quarter of 2021. The form was revised to account for the extension of Covid related tax credits from 2020 into 2021.
  • In June 2021, the IRS released a revised 941 to be used beginning with the second quarter of 2021. The form and instructions were revised to account for extensions of Covid related tax credits that were amended and expanded by ARPA.
  • The instructions now include 5 worksheets used to calculate the Covid tax credits.
  • In April 2021, the IRS released a revised version of Form 7200. The form and instructions were revised to accommodate extensions of Covid related tax credits that were included in ARPA.  Employers generally will use Form 941 to claim the tax credits; however, an advance of the credit may be claimed using Form 7200.

Are you ready for Year-end 2021?

Year-end can be overwhelming if you don’t know where to start.  Planning is key to success and preparation should take place all year long.  Not only do you need to perform all your usual work, but year-end brings many additional tasks all of which need to be completed accurately and on time.  It is imperative that you decide early if you need to seek external assistance.

We are here to help!

Our team of experts stay apprised of the constantly changing requirements that affect year-end. Here are a few ways our experts can help you:

  • Balance and reconcile taxes
  • Verify FEINs, State Withholding, and Unemployment Account Numbers
  • Register for tax accounts in new states and locals
  • Post Taxable Fringes, Adjustments, Voids, and Third-Party Sick Pay
  • Multistate Taxes/Remote employees/Nexus
  • Create a year-end checklist and training documents
  • Assist with end of year employee communication

A solid year-end starts with a great beginning.  Now is the perfect time to start preparing for year-end 2022 while 2021 is still fresh in your mind.  Our goal is to provide you with a proactive and efficient approach to tackle year-end.

With PayTech by your side, you can cancel that order for an extra case of K-cups.

PayTech is a trusted partner who takes the work out of payroll tax compliance

When you’re looking for year-end help, choose a company that offers customized services that fit your needs and not cookie cutter solutions;  a partner that offers strong expertise, a proven track record, and a team to provide you with the training and solutions you need to manage payroll taxes successfully and minimize risks.

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