Year End
Guide
2013
Dominion Payroll Services (DPS) would like to take this opportunity to thank you
for your business and to wish you a happy holiday season and a prosperous New
Year. Please review this year end guide carefully to ensure that you are aware of
any and all action items that may affect your company. Following the guidelines
and meeting the deadlines in this guide will allow us to ensure accurate year end
reports and timely filings with the various tax authorities.
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Dear Friends of Dominion Payroll Services,
It is that time of year again… year-end is upon us! This document is a crucial part of our fourth quarter and year-end education
process and will help you guide you smoothly through a successful end of the year. Please read this document carefully and
respond to us with any adjustments and notifications as soon as possible.
As always, if you have questions that are not addressed in these documents or need further clarification, you may contact our
Richmond Operations Office by dialing 804.355.3430.
Thank you,
The Dominion Payroll Services Team
Table of Contents
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Important Deadlines and Holidays
How to Review Employee Information and Schedules
Vacation, Sick, PTO review
1099 Miscellaneous Forms
Bonus/Holiday Checks – Things to Consider
Do’s and Don’ts
Health Care Reporting on W-2
Tax Changes for 2014
State Unemployment and Deposit Frequency Notices
W-2 and 1099 deadlines
End of Year CD
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Important Deadlines for Year End
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December 13 – Review year-end guide and respond with any changes or adjustments
December 30 – Last day to process 2013 payrolls
January 24 – W-2’s and 1099’s delivered to clients no later than this date.
Upcoming Holidays
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November 28 – Thanksgiving; DPS and banks are closed.
December 24 – DPS hopes to close at noon.
December 25 – Christmas Day; DPS and banks are closed.
January 1 – New Year’s Day; DPS and banks are closed.
January 20 – Martin Luther King, Jr. Federal Holiday; DPS and banks are closed.
Important E-mail Addresses
Customer Service – customerservice@dominionpayroll.com
Processing – processing@dominionpayroll.com
Tax – tax@dominionpayroll.com
Year-end Adjustment Processing Deadline
Please notify us no later than December 13, 2013 of any year-end payroll adjustments. This will provide sufficient
time to record adjustments prior to your last payroll of 2013. We understand that some information related to
closing your 2013 payroll records may not be available by this date, but keep in mind that reporting adjustments
after your last payroll in 2013 could delay your 4th quarter and year-end returns as well as causing additional
processing fees. Examples of adjustments are as follows:
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Void and/or manual checks
Third party sick payments
Fringe benefits
Year-end distributions
Bonuses and other gifts given to employees
Heath Insurance Premiums (only for employers with 250 or more W-2s filed in 2012, due by Jan. 15, 2014)
Vendor 1099 payment recording
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How to review and confirm accuracy of your company and employees’ information
Employee W2 Information
Internet clients (using Paychoice Online):
1. Log into the Payroll module.
2. Select Web Reports.
3. Select Emp W2 and SSN.
4. Select to open the report in PDF, Excel, or Word.
5. Print and review the report.
6. Make updates in Paychoice Online prior to processing your final payroll of 2013.
Non-Internet Clients:
Contact your Payroll Specialist for your company’s Employee W-2 Verification report.
Incorrect information can affect your employee’s W-2 filing and social security wage benefits as well as cause
additional fees for corrections made after the 2013 payroll year has closed.
ACA Reports
If your company filed 250 or more W-2s in 2012, you will be required by the IRS to report the amount of money paid
in medical insurance premiums for your employees on each of their W-2s. Please consult Box C of your 2012 Form
W-3 to confirm the number of W-2s filed in 2012 so that you can prepare to report premiums if necessary.
If your company employs 50 or more full-time equivalent employees (FTEs), ACA requirements will go into affect for
your business starting in 2014. Review your employee count to ensure that you are aware of your status. If you do
employ 50 or more FTEs and need more information regarding ACA and how it affects your business, please contact
our customer service department for resource recommendations.
Payroll Schedules for 2014
Schedules are determined based on your current company policy but can be thrown off when holidays occur and
when check dates fall on weekends. 2014 schedules are available for review now.
Internet clients (using Paychoice Online):
1. Log in to the Payroll module.
2. Select Payroll.
3. Select Dates.
4. Select View Company Schedule.
5. Select to open the report in PDF, Excel, or Word.
6. Print and review the report.
7. Notify DPS of any changes that need to be made.
Non-Internet Clients:
Contact your Payroll Specialist for your company’s 2014 Payroll Schedule
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Vacation, Sick and/or PTO Balances
The system default is that all employee vacation, sick, and PTO balances will be reset to zero after the first payroll in
January unless prior communication regarding carry-over has been received. If you have communicated your carryover preference in past years, your balances are set to carry forward accordingly. If you have not carried forward
balances in past years but would like to start doing so this year, please communicate this information to us by
sending an email to customerservice@dominionpayroll.com prior to the end of December.
1099 Miscellaneous Forms
If you have paid 1099 miscellaneous income through the payroll system in 2013, DPS will produce these forms. If you
have additional 1099’s (for vendors or contractors who were paid earlier in the year and not reported), enter them
using manual adjustments before you process your last payroll for 2013. Always use 1099 Earnings codes to pay
1099 contractors and/or vendors in the payroll system to ensure that the 1099 tax forms are generated properly.
Special Payrolls
Many companies issue bonus checks and other supplemental wage payments in December, and these checks can be
run with a regular payroll. If a separate payroll check date or period end date is desired, the bonus checks must be
run on a separate payroll. You can also issue live checks for bonuses instead of direct deposit. This can be done by
stopping direct deposit for the entire company for a specific payroll or by stopping it on individual checks.
Bonus/Holiday Checks – Things to Consider
1. Run bonus checks as separate checks on the same payroll or as a separate pay run altogether. Our
recommendation? Run them as a separate payroll altogether so you can use global settings to make the
process more efficient. Also, if you run them on the same payroll as your normal checks, the bonus amount
is going to show in the YTD on the check stub, and you'll give away the surprise!
2. If you're running a separate payroll, clearly communicate what the check date for the bonus payroll run
should be. Should it be the same as your normal payroll check date? Should it be the date of your holiday
party? Should it be a different date entirely?
3. Tell us which deductions, if any, should come out of the bonus checks. Some employers withhold only taxes
on bonuses, whereas some employers have 401(k) contributions calculate on bonuses.
4. Pick a tax frequency or percentage. Do you want to take out lots of withholding taxes or a little bit or none
at all? This becomes important particularly on larger amounts, which you may want to tax on a quarterly or
annual tax frequency rather than your normal one. If you go with the percentage option, the one we see
most often used is 25% for federal withholding and 6% for state withholding, which is in line with IRS
guidelines for supplemental wage taxation.
5. Let us know if the checks should be grossed-up. Do you want your employees to receive a nice, round figure
(and no, we’re not talking about "0") as their net check? If you do, would you like us to gross the checks up
for just FICA/Medicare taxes or for withholding taxes as well?
6. Specify whether you'd like the bonus checks to be paper checks or direct deposit vouchers.
7. Keep in mind that if your employees access their check stubs online, those bonus check stubs will be posted
when we run the payroll. If you do not what the employees to be able to see the bonus check stubs online,
please let us know ahead of time so that we can turn off the check stub view for the employees that week.
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DOS AND DON’TS
Topic
Void Checks
Do
Do void fourth quarter checks on
or before your last payroll process
for 2013.
Manual Checks
Do enter them on or before your
last payroll process for 2013.
Address Changes
Do make all address changes on or
before your last payroll process for
2013.
Payroll Calendar
Do verify payroll processing
schedule/calendar by 12/13/2013.
Do review the following reports
under Web Reports and Company
Setup for online clients:
Verification
1099 master file
information
1099 Information
Payroll Tax
Information
Group Term Life (GTL)
Third Party Sick Pay
Fringe Benefits
Emp W2 and SSN Report
Employee W-2 Verification Report
Tax IDs and Rates
Internet customers enter
online/non-internet clients submit
to the Processing Department
before you process the last payroll
of 2013.
Internet customers enter
online/non-internet clients submit
1099 earnings to the Processing
Department before you process
the last payroll of 2013.
Do send all payroll tax documents
received from federal, state and/or
local tax authorities to the Tax
Department.
Do enter on or before your last
payroll process for 2013.
Send all 3rd Party Sick Pay to the
Processing Department on or
before your last payroll process for
2013.
Do report any additional fringe
items on or before your last payroll
process for 2013.
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Don’t
Do not void prior quarter checks.
Send a note to the processing team
to let them know about prior
quarter checks to be voided.
Do not enter negative manuals for
prior quarters without consulting a
DPS representative.
Do not enter GTL on terminated
employees or use manual
adjustments for 2013 figures after
the last 2013 payroll. Call DPS for
instructions.
Do not enter manual adjustments
after the last 2013 payroll process.
Send them to the Customer Service
department for processing.
Health Care Reporting on W-2 – Requirement for Large Employers
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If your company filed more than 250 W-2's in 2012, the ACA W-2 reporting requirement applies and you are
responsible for reporting the total costs (regardless of employee-paid portion vs. employer-paid portion) of
health insurance on their 2013 W-2's.
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Typical costs to include are those behalf of the employees for group health insurance plans. For more
detailed explanation of these items, please refer to the IRS website[1].
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Since this information may not be available until after the close of the 2013 calendar year, we ask that you
compile a list of the employees and their premiums in January of 2014 and send us the spreadsheet by
January 15th so that we can add those values to your W-2s.
[1]http://www.irs.gov/pub/irs-drop/n-12-09.pdf
IRS Notes for 2014
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FICA Social Security will remain at 6.2%.
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Medicare tax rate increased in 2013 from 1.45 percent to 2.35 percent on wages earned above $200,000 for
single filers and $250,000 for joint filers ($125,000 for a married individual filing separately), and the new
rate remains in effect.
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This increase only applies to the employee Medicare portion of the Federal Insurance Contributions Act
(FICA) tax. Consequently, employers do not have to match the increased Medicare tax amount from
employee’s wages.
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NOTE: The employer is required to withhold the increased amount from all workers with wages
exceeding $200,000, regardless of the marital status claimed on the employee’s Form W-4. Over- and
under-withholding for the employee will be reconciled upon the filing of his/her tax return.
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Social Security Tax Wage Base increase: In 2013, that maximum is $113,700. It will rise in 2014 to
$115,500.*
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401k contribution limits: Steady at $17,500 with catch-up of $5,500 for employees age 50+.*
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Simple IRA contribution limits: Steady at $12,000 with catch-up of $2,500 for employees age 50+.*
*These amounts have not been finalized as of October 3, 2013.
State Unemployment Rate and State Deposit Frequency
You should receive your 2014 state unemployment rate and your state deposit frequency during the next two
months. Once you receive these notices, please fax them to us at 804.355.3432 or email them to the Tax
Department (tax@dominionpayroll.com). This will ensure the accuracy of your tax liability calculation and timely
deposits of the associated taxes.
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W-2 and 1099 Deadlines
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W-2 deliveries will begin Monday, January 13th. W-2's will be shipped to your offices no later than January
24th. The forms will be in a separate package labeled 'W-2'.
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If you are a paperless client, we will deliver paper W-2's to your delivery address on file.
2013 End of Year CD
In February 2014, you will receive a CD with all of your 2013 payroll information. The disc contains:
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Reports of every payroll run,
quarterly returns,
employee check stubs,
and copies of all W2s and 1099s.
As an employer, you are required by law to retain copies of all payroll information for seven (7) years.
The CD archival fee ranges from $49 to $199, depending upon the amount of data included in the archive (related to
the size of your company). If you choose to opt out of this service, please let us know in advance by sending an
email to customerservice@dominionpayroll.com stating your client code and that you decline the CD archival
service.
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