August 27, 2020 Year-End Payroll Planning

Are you Ready for Year-End?

If year-end isn’t on your radar as September 2020 rolls in, it would be a good idea to move it up the priority list. As eager as most of us are to see 2020 depart, we must first manage a more-complex-than-usual year-end. Wise Tax Compliance Manager, Lynn Lauricella, CPP, reports that her team is preparing to accommodate increased requests for year-end help. To help clients, Lynn has compiled notes to consider as payroll teams prepare to face the last quarter of this complicated year.

What to Expect for Year-End

 

There are FFCRA and CARES Act credits and Social Security deferrals to account for. “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 a 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 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.” To date, the Wise tax team has helped clients claim an average of $348,000 in COVID Act credits.

 

Another question this year is 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,” says Lynn. Since there is no assurance that all states will declare the same exception to the rules, this is an area to watch. Check out our article about Tax Jurisdiction Registration for more information about how changing worker locations might require an application for unemployment and withholding account numbers in new locations.

 

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 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 – some of this information is even required on the 2020 W-2
  • Tracking credits employers have taken or should take
  • Comparing payroll deferrals and credits to quarterly reports

 

Lynn suspects that things could shift further if another COVID Act is passed. Wise payroll professionals can help companies with tracking payments, credits and social security deferrals, completing quarterly audit and reconciliation, and comparing to quarterly reports. Understanding the new legislation and how it applies to your organization and maintaining accurate records payroll by payroll are key to getting ready for the 2020 year-end experience.

 

Reach Out to our Team of Wise Consultants Today

 

We anticipate a higher-than-usual volume of year-end requests, so please reach out now if you are interested in finding out how Wise experts provide accurate, timely year-end assistance. To speak with a Wise consultant, email HCMHelp@WiseConsulting.com or give us a call at 800-654-4550. You can also contact us through our website.

Two people analyzing finances for year-end planning
Interested In Learning More?

Contact Us Today!

About Us

Because Wise is 100% employee-owned, our consultants are professionally invested in your success. We make time to understand each client’s methodology and goals, aligning our strategy and sharing best practices to assure optimal results.

Contact Wise

We want to hear your questions and make sure you receive the information you need to make an informed decision about engaging our services. Give us a call during normal business hours (est) or reach out to us online and we'll get in touch with you as soon as possible!

Frequently Asked Questions

Prospective clients have questions and we aim to be as transparent as possible in answering them. read out FAQs to see the most requested information, or contact us. We'd be happy to speak with you to answer any questions you have!