Message from the President

Dear Valued Client,

I want to personally thank you for trusting FlexChecks with your payroll needs in 2025. Working with outstanding clients like you—and backed by our exceptional team—makes it a privilege to deliver the reliable services and tools you count on every day.

Whether you’re a longtime FlexChecks partner or wrapping up your first year-end with us, please review this information carefully. Your prompt attention will help us process W-2s efficiently, so your employees receive them right after the start of the new year.

FlexChecks Holiday Schedule

We provide time off for the Holidays for our outstanding, committed staff so they can spend time with family and friends. When submitting payrolls during the Holidays, keep in mind that payrolls should be submitted to FlexChecks at least two (2) business days in advance (taking Federal Reserve Holidays into consideration). ** IMPORTANT: If your payroll check date is normally Thursday, it will be moved for Thanksgiving, Christmas and New Years Day to either the Wednesday before or the Friday after, depending on your setup. To confirm, navigate in isolved to Payroll Run Schedule. We are requiring all payrolls with check date 12/24/2025 to be submitted by 10 AM on Monday, December 22nd** If your payroll is NOT received two business days in advance, your direct deposits may be delayed until the day after your scheduled payroll date (to allow the Federal Reserve two (2) days to process). If you need next day direct deposits, please reach out to your Client C.A.R.E. Team Leader.

• Thanksgiving: Thu, Nov 27, 2025 – CLOSED
• Day after Thanksgiving: Fri, Nov 28, 2025 – CLOSED
• Christmas Eve: Wed, Dec 24, 2025 – CLOSED at NOON
• Christmas Day: Thu, Dec 25, 2025 – CLOSED
• New Year’s Day: Thu, Jan 1, 2026 – CLOSED

Note: UPS Next Day Air recommended for year-end shipments. Contact your Client C.A.R.E. Team Leader for details.

Client Processing Deadlines

Bonus Checks

If you plan to process bonus checks for year-end, please be aware of the following:

• Bonus checks can be effective on the same day as your normal payroll.
• Bonus checks can be effective on a day different than your normal payroll.

Bonus runs can include adjustments to normal payroll as follows:

• Deductions & Benefits: You can specify which deductions or benefits you would like calculated.
• Paid time off: You can specify if you want paid time off calculated.
• Direct Deposit: You can choose to have direct deposits or not (on any or all bonus checks).
• Withholding: You can specify how you would like taxes withheld, or calculate at normal rates.
• Gross-up option: Bonus checks can be grossed up (you give us the net, we determine the gross amount).

All of the above can be transmitted to FlexChecks by using our Miscellaneous Payroll Form — click below to open the form instantly:

Special Information about Bonus Payrolls with federal tax liabilities in excess of $100,000:

Federal tax liabilities in excess of $100,000 must be deposited by the next banking day after the check date to avoid penalties and interest.

FlexChecks Tax Service clients must report this payroll to FlexChecks at least five business days prior to the check date.

In addition, FlexChecks also applies certain restrictions to large bonus payrolls that may require a wire transfer prior to check date. If these restrictions apply to your bonus payroll, FlexChecks will supply you with the necessary wire instructions.

Manual Checks

If you paid employees net pay outside a normal payroll run that has not been forwarded to our office for inclusion with a regular payroll, be sure to forward the information to our office before your final payroll for 2025.

Fringe Benefits

Employers that provide taxable non-cash fringe benefits to their employees must include the cash value of such benefits as wages. One of the most common fringes is personal use of a company vehicle. It is fully taxable. Please report this to FlexChecks no later than your last payroll of the year.

IRS Employer’s Tax Guide to Fringe Benefits

HSA Contributions

All amounts contributed to an HSA need to be reported. This includes amounts deducted from the employee as well as employer contributions. If you made contributions for employees and have not included them as a benefit through payroll, please contact us so we can add the amounts paid.

Third-Party Sick Pay

If you have not reported ANY 3rd party Sick Pay benefits to FlexChecks for 2025, you should contact your provider to confirm they will be handling all filings including processing of W-2 and any federal and state returns. If you have processed 3rd Party Sick Pay benefits with FlexChecks for 2025, any portion still to be included as income must be submitted no later than your last payroll of the year.

Deferred Compensation Plans

In general, amounts deferred to Section 457 plans and non-qualified deferred compensation plans with a substantial risk of forfeiture become taxable for FICA and FUTA when the employee becomes vested. When an employee becomes vested, please provide your Client CARE Team Leader with:

• The date the employee became vested.
• The amount of employee and employer current year’s contributions before the vested date.
• The total amount of employee’s and employer’s current year contributions for prior years.
• The amount of employee FICA you collected on the employee and employer contributions.

When a vested employee receives a distribution, please report:

• The distribution amount.
• Whether this is a partial or full distribution.
• The amount of federal tax withheld on the distribution.
• If the distribution is attributed to employee or employer contributions.

S-Corp Health Insurance

Health and accident insurance premiums paid on behalf of a greater than 2% S Corporation shareholder must be reported on Form W-2, and are subject to federal, state, and local income taxes. They are not subject to FICA or FUTA taxes. The shareholder is eligible for a deduction for premiums paid on their individual income tax return if certain requirements are met.

Year-End Delivery Considerations

We cannot guarantee timely US Postal Service delivery during the holiday season. We suggest delivery of your payroll by UPS, which is trackable. If you prefer to temporarily change your shipping method, you MUST inform your Client CARE Team Leader. Please see UPS's Year End Shipping guide below.

UPS Holiday Pickup Schedule

Important Year-End Dates & Office Closures

Mark your calendar — includes payroll deadlines, office closures, and IRS/filing dates:

Audit Tools & W-4 Forms

Audit Tools – Start NOW!

• Verify the Social Security Number, name, and address for each employee (the name and number must be exactly as it appears on the employee’s Social Security card).
• Social Security Numbers that are flagged as invalid will appear on all documents as 000-00-0000. This is the employer’s responsibility to correct prior to year-end.
• Use the following report for auditing purposes:
  Employee W-2 Verification Report
  Reporting > Client Reports > Employee W-2 Verification > Generate Report > Go to My Reports Queue
• Any updates to name, SSN, or address should be made immediately:
  Employee Management > Employee Maintenance > General

W-4 Forms – Get Ready for 2026

The isolved system will not automatically begin any ‘new’ withholding if a W-4 has not been completed in the system.

We suggest that the employer send a reminder to employees about submitting a new W-4 for 2026.

Tax Forms

W-2s: Your W-2 billing will be included with your final Payroll invoice of 2025. If you have any questions on your W-2 costs and how this will affect your final payroll, please contact us. FlexChecks will ship your W-2’s, and if you currently use our online payroll portal, they will be available to you electronically as well. As the employer, you have the option to furnish your employees with the paper form that we provide you or you can receive consent for your employees to only receive the forms electronically. For more information, contact us.

W-2 printing will begin following your final scheduled payroll. If you have requested a W-2 hold for the 2025 year, your W-2’s will be printed following the processing of your adjustment.

If you’re using iSolved, you can now preview your W-2’s. To do so, go to Reporting – Client Reports and search for “W2”, then choose the Employee W2 Preview. This report will also run automatically with your last scheduled payroll of the year. You can find it in your Report Archive.

1099s: Let FlexChecks handle your 1099s in just four simple steps — we’ll file with federal & state agencies and mail originals directly to recipients!

Note: Payments of less than $600 do not require a 1099 (unless paid to an attorney).

FlexChecks 2025/2026 Fee Guide

The following fees apply to year-end and special payroll services. All fees are billed with your final 2025 payroll invoice or the applicable payroll run unless otherwise noted.

ACA Year-End Requirements

Employers are responsible for two important components of ACA Year-End requirements: Furnishing and Filing.

You need to furnish individual 1095 forms to all employees who were full-time during 2025. These forms will contain information about:

• When/if coverage was offered
• Whether the offered coverage was affordable (based on IRS guidelines)
• If self-funded, which employees and dependents were covered throughout the year

Depending on individual state requirements, employees may need this form to provide proof of coverage for tax year 2025.

Employer Responsibilities

It is the employer’s responsibility to:

• Carefully review and make any necessary corrections
• Override portions of the forms that cannot be automated
• Approve ACA forms by the February 5th deadline

ACA employer IRS filing requirement is not considered complete until you receive confirmation that your ACA files were successfully transmitted to the IRS as either Accepted or Accepted with Errors.

The isolved ACA team will provide this filing status no later than 06/30/2026.

Additional ACA Resource

IRS Q&A – www.irs.gov/Affordable-Care-Act/

Important Deadlines for Reporting

Reporting of Employer-Sponsored Health Coverage: Box 12, Code DD

The Affordable Care Act requires that employers must report the cost of employer-provided health care coverage on Form W-2.

• Reporting is mandatory for employers that file 250 or more Forms W-2 during the prior calendar year.
• The amount reported should include both the amount paid by the employer and the amount paid by the employee for the benefit coverage.
• Please contact Customer Support to discuss the entry of the employer portion of the health insurance premium.
• It is the employer’s responsibility to examine the W-2s and verify the amounts in Box 12 Code DD prior to printing.

FUTA Credit Reduction

Some states take Federal Unemployment loans if they lack the funds to pay unemployment benefits for state residents. If a state has outstanding loans with the federal government, the FUTA credit rate for employers in that state will be reduced until the loan is repaid.

The result of being an employer in a credit reduction state is that a higher tax is due on Form 940. This higher tax is considered to be incurred in the 4th quarter. Therefore, your company will owe additional federal unemployment taxes that will need to be impounded.