Get answers to frequently asked questions about processing year-end payroll.
Have a question about processing year-end payroll? In the sections below we answer the most common questions.
|Note: The information contained in the Intuit Online Payroll Year End Center is meant to provide general information about the payroll process. It isn't intended to provide tax or legal advice. Always consult your tax professional when preparing tax documents.|
Dates and Deadlines
To still pay your employees on time, you can issue a handwritten check along with printed pay stubs instead of processing a direct deposit check. Just remember to cancel any unprocessed direct deposit checks first if you decide to create a manual check.
If you create a direct deposit check and miss the processing deadline time, your check will be processed the next business day. This will result in your employees being paid one business day later.
By check date. If hours are worked in 2019 and paid in 2019, the paychecks belong in the 2019 payroll. If the hours are in 2019, but paid in 2020, the paychecks belong in the 2020 payroll.
Check out Direct deposit (DD) FAQ to be sure that any direct deposit payments are applied in the correct year.
Run bonus checks or large payrolls early to allow time for a potential credit review.
You can run a bonus together with a regular pay check.
- To create a bonus together with a regular check, you must include the amount of the bonus when creating regular checks.
- For the Bonus Pay field to appear, you must add the bonus pay type.
Or you can create a separate bonus check: There are several reasons why you might decide to do this.
- You want to control the tax treatment of a bonus or the withholding of retirement account deductions.
- For example, an employee might want a discretionary bonus to be withheld at the flat 22% supplemental rate for federal income tax. It's not possible to control the tax rate when you include the bonus on a payroll check.
- You want to turn off Direct Deposit for the bonus check.
- You're paying the bonus off-cycle, not on a regularly scheduled payday. (You can use a bonus check to pay back wages or underpaid wages.)
- Your employee has accumulated $1,000,000 or more in supplemental wages and you are required to withhold federal taxes at the 37% rate.
- A big reason bonus checks are created separately is psychological. If the amount was just lumped into the paycheck, it wouldn't feel like a special event.
Check out Add a bonus to a regular check or as a separate bonus check for additional information.
Jan 1, 2020 (01/01/2020) is a federal holiday.
- Choose another banking date to pay your employees if you are paying by direct deposit.
- You can also give out handwritten checks along with printed pay stubs. Based on the rules of constructive receipt, these wages should be reported in the 2020 tax year because of the 2020 check date.
Before preparing your last payroll of 2019 or the first payroll of 2020, verify the year in which the wages should be reported:
- 2019 wages should have a 2019 check date;
- 2020 wages should have a 2020 check date (1/1/2020 or later).
Things to know
- If you did run a direct deposit payroll with a pay date of 1/1/2020, your employees would receive their deposits on 12/31/2019 if the payroll was approved before 5 pm Pacific Time on 12/27/2019.
- This would violate constructive receipt, since the employees would have access to funds in 2019, but the paychecks would be reported in 2020. (If the payroll was approved after 5 pm Pacific Time on 12/27/2019, the employees would receive their deposits on or after 1/02/2020, which would conform to constructive receipt).
When any single payroll (or a combination of payrolls within a 7-day period) has a federal tax liability amount that exceeds $100,000 (line 10 of Form 941 or line 9 of Form 944), you must make the tax payment by the end of the next banking day after the paycheck date.
This is regardless of your current deposit schedule. Don't worry, you can do the following to make the payment
- Two or more days before the due date: You can still make the payment from your Intuit Online Payroll account.
- Less than two days before the due date: Make the payment directly on the IRS EFTPS (Electronic Federal Tax Payment System) website or from a financial institution that's authorized to make same-day, federal tax payments.
Company, Employee, and Benefits Information
We recommend that you keep your employees' names, addresses, and SSNs current. This information needs to be complete and accurate before you prepare your employees' 2019 W-2s.
If an employee record is missing an SSN, you won't be able to process W-2s for any of your employees.
Regardless of the current employee status, any employee who received a paycheck during the year will receive a W-2 form for that year. Be sure to check terminated employees for:
- Names, address, and social security numbers.
- Retirement plan eligibility.
How do I handle benefits like Nontaxable Per Diem, Personal Use of Company Car, S-Corp Owner's Health, Group Term Life (GTL), and HSA Contributions?
It's important that these supported benefits are reported accurately on year-end forms. To do so, make sure that the pay type is included on the employee record and that the amounts are recorded correctly.
How do I handle pay types and benefits that aren't currently supported in, like Third-Party Sick Pay and Allocated Tips?
To ensure these benefits and pay types are reported correctly on year-end forms like the employee W-2, contact us.
For information about third-party sick pay and allocated tips, see IRS Publication 15, Circular E: Employer's Tax Guide and Instructions for Form 8027: Employer's Annual Information Return of Tip Income and Allocated Tips.
When you prepare the employee's W-2 form, Intuit Online Payroll will pre-fill the local tax code field, so you don't need to look it up.
If an employee has had more than two local taxes withheld during the year, Intuit Online Payroll generates a second page of W-2 forms for the employee. The second page shows only the employee information, the employer information, and the local taxes (not the federal or state tax information).
Check 2018 Federal Unemployment Tax ACT (FUTA) Credit Reductions for information about credit reduction states.
On January 1, 2012, Act 32 went into effect in Pennsylvania and became mandatory for all Pennsylvania employers.
Act 32 provides for the reform and standardization of the local Earned Income Tax (EIT) tax collection system for local government agencies and school districts.
All local tax jurisdictions are subject to Act 32, except for Philadelphia. For details and instructions, visit pa.gov.
Many federal and state agencies have been working to incorporate late-breaking changes to their annual tax forms, so they may appear to be available later than usual.
We incorporate federal and state forms into your Intuit Online Payroll account as soon as the agencies make them available to us and, when they become due, we add the forms and filing dates to your To Do List.
Paychecks have associated tax and other liability calculations and payments that need to be taken into consideration.
For example, if you record a paycheck that was issued in a prior quarter, you'll probably need to recalculate payroll taxes and re-file forms.