May 21, 2020Coronavirus, Year End Payroll Planning
Planning for a Different Kind of Year-End Starts Now
While Wise consultants perform Year-End work for many clients each year, it is possible that no one has ever seen a year quite like 2020 is shaping up to be. Lynn Lauricella, CPP, a Compliance Manager with Wise Consulting, has her eye on the changes that will impact Year-End. To help clients prepare, Lynn has compiled notes that might be helpful to consider.
2020 Will Be a Moving Target In Terms of What to Expect for Year-End
There are FFCRA and CARES Act credits and Social Security deferrals to account for. “Employers can start applying for credits in the second quarter. This might create more of a reconciling than many are used to. For our clients, we are tracking social security deferral because they need to know what their liability is to prepare for when they need to pay it back. Everyone will need to have back-up for the credits they are claiming as proof, plus you want to track them to make sure you are not receiving too much or too little under the legislation,” says Lynn.
She points out that 2020 is a bit of a moving target in terms of what to expect and how to roll with developing information and rules. “One of the main differences this year is going to be the new 941 form.” The 941 is the federal quarterly tax form used by employers to report income taxes, social security tax or Medicare tax withheld from employee’s paychecks and pay the employer’s portion of social security or Medicare tax. “It will take a different type of reconciling to make sure it is accurate. Employers need to be tracking the credits they are claiming.” Take a look at the article about our 941 Tracking Assistant to learn more.
Another difference this year is likely to be how states will decide to handle issues of nexus. “Because of the many closures of physical office locations, there are workers who have been displaced to work from home and are now working across state lines from their regular in-office location. Normally a remote worker’s taxes would be tied to their home state. But several states have come out to say they will not assert nexus for newly remote workers who have been displaced from their workplace temporarily.” Since there is no assurance that all states will declare the same exception to the rules, this is an area to watch.
Employers Need To Focus On Tracking Payments, Social Security Deferrals and More
While this list should not be considered a definitive checklist or official advice, we believe employers should now be (on a payroll by payroll basis):
• Tracking employer Social Security deferrals
• Tracking any payments; family leave, sick leave, CARES-eligible amounts being paid to employees
• Tracking credits taken employers have taken or should take
• Comparing payroll tracking to quarterly reports
Lynn suspects that things could shift further if a new stimulus package gets passed. Wise payroll professionals can help companies with tracking payments, credits and social security deferrals, completing quarterly audit and reconciliation, and comparing tracking to quarterly reports. Getting started early, understanding the new legislation and how it applies to your organization, and maintaining accurate records payroll by payroll will be key to being ready for a different Year-End experience.
Reach Out to our Team of Wise Consultants Today
To speak to a Wise consultant about how to start planning for Year-End now, email HCMHelp@WiseConsulting.com or give us a call at 800-654-4550.
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