Year-End Payroll and Tax Checklist

Here is a checklist for payroll and payroll tax administrators to use as you approach the year-end and tax season.

Reviewed holiday schedule for Thanksgiving, Christmas, New Years, Martin Luther King, and Washington/Lincoln’s Day. Enter holiday hours where applicable.

Notified employees to review W-4 status, to file a new W-5 for employees receiving advanced earned income credit, and to file a new W-4 for employees claiming exempt or claiming over 10 exemptions

Verified questionable social security numbers

Removed any non-standard 401K limits

Reviewed PTO plan rolls

Reviewed deduction/supplemental pay limits and periods

Identified last payroll(s) of the current year and first payroll(s) of the new year.

Verified earnings and deductions tax flags.

Contacted Accounts Payable requesting information regarding payments such as:

• Taxable and non-taxable moving expenses
• Personal use of company-provided automobiles
• Non-accountable business expenses
• Non-Cash Fringe Benefits
• Awards
• Taxable Educational Assistance
• Petty Cash Payments
• Adoption Assistance

Developed a schedule with Accounts Payable to receive data

Reviewed Negative Wage Report

Scheduled year-end payroll adjustment runs for recording reportable compensation. Schedule should consider tax requirements

Determined method of W-2 distribution (e.g., distribute internally for active employees and mail the remaining forms) and notified mailroom, if appropriate.

Informed mailroom where to distribute undeliverable or returned Forms W-2, (e.g., payroll, human resources, etc.)

Scheduled any quarterly or unique year-end reports.

Verified legal name and address which will print on the W-2s

Determined W-2 sort for employee and employer copies

Identified earnings or deductions codes that should be suppressed from printing on the W-2 or summarized

Determined logic for W-2 pension and deferred compensation boxes

Contact plan administrator if clarification is necessary.

Verified tax ID numbers. Follow-up on any “applied for” numbers

Reset 1999 Benefit Limits and special accumulators.

Source: ProBusiness, Palo Alto, CA, December 4, 1998. ProBusiness provides outsourced payroll processing, payroll tax and benefits administration services, as well as human resources software, to large employers within diverse industries.