The annual payroll closing process including final payroll runs, W-2 and 1099-NEC production, federal and state tax reconciliation, and FUTA true-up. W-2s must be furnished to employees and filed with the SSA by January 31.
Why Year-End Payroll matters for employers
Year-end payroll processing involves reconciling all payroll tax withholdings against tax deposits made throughout the year, identifying and correcting any discrepancies before W-2s are produced, imputing any taxable fringe benefits not processed through regular payroll, and generating W-2s and 1099-NECs for all applicable workers. Electronic filing with the Social Security Administration is required for employers submitting 10 or more W-2s.
The January 31 deadline applies to both employee copies of W-2s and SSA filing. Missing this deadline results in per-form penalties that increase with the duration of delay. ACA reporting (Forms 1094-C and 1095-C) for applicable large employers has a separate deadline in March. BEG manages the entire year-end close process for managed payroll clients.
How BEG handles Year-End Payroll for clients
BEG Managed Payroll handles Year-End Payroll as part of a fully managed payroll service at $25-$45 per employee per month. Clients do not need to track compliance rules, filing deadlines, or calculation methods related to Year-End Payroll on their own. Everything is included. Learn about BEG Managed Payroll.
Frequently asked questions
Do employers have to manage Year-End Payroll themselves?
No. A managed payroll provider handles Year-End Payroll as part of full-service payroll. BEG manages this for clients at $25-$45 PEPM with no system migration required.
What happens if Year-End Payroll is handled incorrectly?
Errors related to Year-End Payroll can trigger IRS penalties, state agency assessments, or employee disputes. Catching and correcting errors before filing is far less costly than after-the-fact corrections.
How does BEG handle Year-End Payroll for managed payroll clients?
BEG tracks, calculates, and remits everything related to Year-End Payroll as part of fully managed payroll. Clients do not need to monitor compliance -- that is included in the service at $25-$45 PEPM.
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About the author
Anthony Moretti is VP of Sales at Business Executive Group, where he builds BEG's managed payroll and HR service verticals for employers across Dallas-Fort Worth and nationwide. He writes the BEG Payroll Glossary to give employers plain-English answers on payroll and compliance.
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